Another state settles Medicaid fraud allegations with Centene

By: - December 12, 2022 4:50 am

The Centene Corporation headquarters. Photo from Google Maps.

Oregon on Tuesday became the latest state to settle fraud claims with a Medicaid managed-care giant. Litigation in such matters began in Ohio in 2021.

St. Louis-based Centene, the largest Medicaid managed-care provider in the United States, agreed to pay Oregon $17 million, according to a statement from the state’s attorney general and its insurance commissioner. Centene has emphasized that it admits to no wrongdoing in a series of such settlements, while the Oregon statement said its “investigation focused on whether Centene failed to provide certain pharmacy discounts in Oregon, resulting in inflated fees paid to Centene.”

The announcement makes Oregon at least the 13th state to settle with St. Louis-based Centene over similar fraud claims.

The dispute started in Ohio when Attorney General Dave Yost sued the company in March of 2021. That suit accused Centene subsidiary Buckeye Health Plan of working through two Centene-owned pharmacy middlemen to overcharge taxpayers by millions of dollars for prescription drugs.

The investigation followed reporting in 2018 by The Columbus Dispatch showing that a year earlier, Buckeye charged the state $20 million for services provided by its drug middleman. But those same services appeared to have been rendered by a separate company — CVS — that was also paid, the story said. Both Centene and CVS denied that they were double-dipping.

In June of 2021, just three months after the suit was filed, Yost and Centene announced a settlement agreement that would pay Ohio $88.3 million. Centene also announced that it was setting aside more than $1 billion to settle similar claims with as many as 20 more states.

In August of 2021 — just six months after the Ohio attorney general accused Centene of massive fraud against Ohio taxpayers — the Ohio Department of Medicaid signed a new contract worth billions with the company. The department justified the move by saying that it would no longer use the company for pharmacy benefit management services.

As a managed care provider, Centene’s Buckeye contracts with the Medicaid department to sign up patients and create networks of providers such as doctors and dentists to care for them. Pharmacy benefit managers, on the other hand, contract with such managed care organizations to create lists of covered drugs, contract with pharmacies and reimburse them for the drugs they dispense.

In the wake of the Ohio settlement, Centene in November 2021 announced that it was exiting the pharmacy benefit management business altogether.

In the Oregon settlement, officials emphasized that they were protecting the poor and vulnerable, but they were silent on whether the state would continue doing business with Centene. The Oregon Health Authority’s website indicates that the state continues to do business with Centene’s Trillium Health Plan.

“This pharmacy partnership with Centene was meant to help some of our most vulnerable, but this company took advantage of Oregon,” Attorney General Ellen Rosenblum said in a statement. “This settlement is one more way we can help reign in the price of prescription drugs.” 



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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.