Sixth state settles with Medicaid contractor
The Centene Corporation headquarters. Photo from Google Maps.
New Hampshire became the sixth state to announce a settlement with a Medicaid managed-care company that Ohio first accused of ripping off taxpayers.
In a statement last week, New Hampshire Attorney General John M. Formella said that St. Louis-based Centene had agreed to pay the state $21.1 million to settle state claims that Centene overbilled the state’s Medicaid department by $2.4 million for prescription drugs between the beginning of 2016 and the end of 2021.
The funds will come from $1.3 billion Centene set aside for such disputes last year. Mississippi, Kansas, Arkansas and Illinois already have announced settlements totaling $154 million with the company.
As it has in agreements with other states, Centene admitted to no wrongdoing in its settlement with New Hampshire.
Ohio Attorney General Dave Yost in March sued the managed-care giant, accusing it of overbilling that state’s Medicaid program by tens of millions. Centene swiftly settled in June, agreeing to pay Ohio more than $88 million and setting aside funds to pay 21 other states, which haven’t filed lawsuits in the matter.
Centene is the largest Medicaid managed-care company in the United States. In that capacity, it creates networks of patients and providers such as doctors and hospitals on behalf of the state. It also hired or used its own subsidiaries known as pharmacy benefit managers to facilitate drug transactions.
Disputes over the company’s conduct go back to 2018, when The Columbus Dispatch reported that pharmacy benefit managers owned by Centene and CVS appeared to be claiming they did duplicate work in 2017 for $20 million. Both companies denied that they were double-dipping at taxpayer expense.
New Hampshire began its probe after learning of the action in Ohio.
“The Department of Health and Human Services (“DHHS”) and the Department of Justice (“DOJ”) began a review of Centene’s provision of pharmacy benefit services after similar investigations in other states became public,” Formella’s statement said. “The review focused on concerns regarding Centene’s practices related to the reporting of pharmacy benefit services costs in the Medicaid program, including the pricing of prescription drugs.”
The investigation “concluded that Centene’s inaccurate reporting of pharmacy benefit services costs, and the State’s use of that data received from Centene, resulted in at least a $2.4 million negative financial impact to the State during the settlement period,” the statement said. “In lieu of further review, investigation, and potential litigation, Centene and the State of New Hampshire have agreed to settle this matter in exchange for payment in the amount referenced above and the implementation and continuation of business practices that provide full transparency related to pharmacy benefit claims.”
Ohio authorities caused controversy in August when — just two months after the settlement was announced — the Ohio Department of Medicaid said that it would give Centene a multi-billion-dollar managed-care contract as part of the largest public procurement in Ohio history. Allegations of past misconduct were not counted against the company in a competitive procurement process.
Centene has said that the moves aren’t related to the settlements, but in the wake of the Ohio suit the company has said it’s getting out of the pharmacy-middleman business altogether and Michael Neidorff, its CEO who made $59 million in 2020, announced his retirement.
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