The Rundown

Health care giant Centene settles with another state, California

By: - February 14, 2023 4:40 am

The Centene Corporation headquarters. Photo from Google Maps.

Medicaid managed-care giant Centene has agreed to pay California $215 million to settle a drug-pricing scandal related to one that was initially detected in Ohio.

In a press release last week, California Attorney General Rob Bonta said that two Centene-owned managed-care plans, California Health & Wellness and Health Net, ripped off the state’s Medicaid system, Medi-Cal. They overcharged the system “by falsely reporting higher prescription drug costs incurred by two of its managed care plans,” the statement said.

Between 2017 and 2018, “Centene leveraged advantages in its pharmacy benefit manager (PBM) contracts to save its managed care plans $2.70 per prescription drug claim over the two-year period. (The California Department of Justice) alleges that Centene and its PBM failed to disclose or pass on these discounted fees to Medi-Cal, which inflated fees and drug costs reported to California,” the statement said.

Ohio is the only state to sue Centene over such allegations. In March 2021, Attorney General Dave Yost accused it of funneling  money through two pharmacy benefit managers — drug middlemen — and hiding discounts it had received. 

Centene admitted no wrongdoing, but it agreed to settle with the state for $88.3 million just three months after the suit was filed. It also announced that it was setting aside more than $1 billion to settle similar claims with other states. California is at least the 13th state to settle with the company.

The Ohio suit follows reporting in 2018 by The Columbus Dispatch that a pharmacy middleman owned by Centene might have overbilled taxpayers $20 million for services. Centene denied wrongdoing, but an independent analysis showed that Centene’s Buckeye Health Plan billed the state Medicaid program almost twice as much per prescription as the state’s other four managed care plans.

Even though Centene agreed to pay the state scores of millions over claims of misconduct in its dealings with the Medicaid program, the Ohio Department of Medicaid awarded the company another contract worth billions just six months later.



Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

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.