Ohio’s suing a huge Medicaid contractor. Mississippi’s investigating whether to follow suit

By: - April 19, 2021 12:50 am

The Centene Corporation headquarters. Photo from Google Maps.

Ohio might have started a trend last month when it filed suit against the largest Medicaid contractor in the United States. Now Mississippi is considering litigation of its own.

A spokeswoman for Mississippi Attorney General Lynn Fitch didn’t respond to requests for comment last week, but that office told the Daily Journal in Mississippi that it is considering litigation over possible overcharging by Centene Corp., whose Magnolia Health serves as a Medicaid managed-care contractor there. Officials said any litigation would be similar to that in Ohio, the paper reported.

The same law firm, Ridgeland, Miss.,-based Liston and Deas, is working with both states on matters related to Medicaid and in Ohio it’s helping to handle other pharmacy benefit litigation.

No suit has been filed in Mississippi, so it’s impossible to know exactly what’s being investigated.

But in Ohio, Attorney General Dave Yost is accusing the corporation of using its managed-care company, Buckeye Health, of working through a chain of contractors — including two that Centene owns — to overbill the state for prescription drugs by tens of millions of dollars.

The Ohio Department of Medicaid covers the poorest one-fourth of the Ohio population and has a $24 billion annual budget. So it’s crucial to ensure that such enormous sums are used for their intended purpose.

The Ohio suit accuses St. Louis-based Centene of, among other things, pocketing dispensing fees meant for pharmacists and not passing discounts along to taxpayers. And while the suit doesn’t state a dollar amount it’s seeking, the company collected $20 million in 2017 alone, claiming to provide pharmacy services that another company, CVS, said it provided.

The Ohio lawsuit said that in 2018, Centene marked up its bill for pharmacy benefits by $400,000 in a single week while an outside company was doing most of the work.

Centene does business with 31 state Medicaid programs, and there are similarities between Centene’s arrangements in Ohio and Mississippi.

In both states, the company’s managed-care organizations — Buckeye and Magnolia — hired another Centene-owned company, Envolve, to manage pharmacy benefits. In both states Envolve hired yet another Centene-owned company, Health Net Pharmacy Solutions, to manage the pharmacy benefit. Health Net in turn contracted with CVS Caremark, the nation’s largest pharmacy benefit manager. 

In Ohio in 2017, the cost to administer Medicaid pharmacy benefits under the Centene managed-care plan was more than double what it cost the other four plans — and there are widespread suspicions that even they were gouging taxpayers. The Ohio Department of Medicaid this year is implementing sweeping reforms in response to those suspicions.

Centene insists that its work in Ohio was proper and that it saved taxpayers millions of dollars.

At least one Mississippi lawmaker believes Centene’s conduct under her state’s Medicaid program might be similar to that in Ohio.

“When you look at Ohio, the same company (Centene) is doing the same business here,” Rep. Becky Currie, R-Brookhaven, told the Daily Journal. “And chances are, they’re doing the exact same thing (with pharmacy benefits). The reason I asked for a full audit is if you’re cheating in one thing, chances are you’re cheating in others.”



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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.