Massachusetts has become the latest state to settle with health insurance giant Centene Corp. Alleging that it overbilled the state’s Medicaid program for pharmacy services, KHN has learned.
Centene, the nation’s largest Medicaid managed-care insurer, will pay $14.2 million, according to Massachusetts Attorney General Maura Haley. An official announcement is expected later Thursday.
“This settlement is a significant result in our work to protect taxpayer dollars and the integrity of our MassHealth program,” Haley said in a statement. .”
Centene on Wednesday denied wrongdoing in Massachusetts, as it did in a previously announced settlement. KHN reported earlier this month that Centene agreed to pay Texas about $166 million in July.
“This no-fault agreement reflects the importance we place on addressing their concerns and our ongoing commitment to making healthcare local, simple and transparent,” Senten said in a statement emailed to KHN. “Importantly, this allows us to continue our relentless focus on delivering high-quality results to our members.”
Centene provides health insurance to 15.4 million Medicaid enrollees across the country through contracts with states to cover people with disabilities or in low-income families. The St. Louis-based insurer earns about two-thirds of its revenue from Medicaid, which is funded jointly by state and federal taxpayers.
In many states, insurance companies like Centene manage Medicaid enrollees’ prescription drugs through what’s known as a pharmacy benefit manager. These facility managers act as middlemen As an intermediary between drug manufacturers and health insurers and between health plans and pharmacies.
Centene’s CeltiCare subsidiary offers insurance to Massachusetts Medicaid enrollees until the state begins overhauling its program. Centine also managed pharmacy facilities for MassHealth, the state Medicaid program, according to the attorney general’s office.
A review by Haley’s office found “irregularities in the pricing and reporting of pharmacy benefits and services” by Centene’s pharmacy benefits manager, Involve Pharmacy Solutions, his statement said.
Multiple states have settled with Centene’s pharmacy manager business alleging that it overbilled their Medicaid programs for prescription drugs and pharmacy services. But the state’s total number is not publicly known because many settlement discussions are conducted behind closed doors. Some states, such as California, are investigating the company, KHN first reported in April.
Prior to the Massachusetts settlement, Centine settled with Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas and Washington for a total of $475 million, according to news releases and settlement documents from those states’ attorneys general. The Massachusetts settlement, which was signed Sept. 23, brings the total amount of Centene’s pharmacy services settlement to at least $489 million. Other states have also settled with Centene, but the amount of the settlement — and the states themselves — have not been publicly disclosed.
Centene set aside $1.25 billion to resolve pharmacy benefit manager settlements in 2021 in “affected states,” according to a July filing with the U.S. Securities and Exchange Commission, which did not specify how many states.
Florida and South Carolina signed legal agreements with a Mississippi-based firm, Liston & Dees, which has represented other states in their search for pharmacy facilities in Centene.
Pharmacy benefit managers in general have faced increasing scrutiny and criticism. The Federal Trade Commission announced in June that it was launching an investigation into the pharmacy benefit management industry and its impact on consumer access to prescription drugs and drug costs.
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