Centene Corp. agreed to pay more than $215 million to California over allegations it overcharged the state for pharmaceutical services — the largest payment to date by the nation’s largest Medicaid insurer for their drug pricing activities.
The deal announced Wednesday makes California at least the 17th state to settle claims for drug bills totaling $939 million with the St. Louis. Centene reported $144.5 billion in revenue in 2022, up 15% year-over-year.
State Department of Justice investigators found that Centene subsidiaries reported inflated drug costs and fees in providing prescription drugs to patients in Medi-Cal, the Medicaid insurance program. state budget for low-income and disabled individuals, January 2017 through December 2018.
Not a Modern Healthcare subscriber? Sign up today.
Attorney General Rob Bonta, a Democrat, said in a statement: “When companies overcharge for the Medi-Cal system, it drains valuable resources from those who rely on them. this care.
As has happened in previous settlements, Centene denies wrongdoing. In California, the insurer operates two subsidiaries: California Health & Wellness and Health Net, which together provide coverage to approximately 2 million Medi-Cal patients statewide.
“This no-fault agreement reflects the importance we place on addressing their concerns and our ongoing commitment to providing local, simple, and affordable healthcare. simple and transparent,” Centene said in an emailed statement to KHN.
Most states contract with private insurers like Centene to cover people in their state Medicaid programs, which are paid jointly by state taxpayers. and federal. In many of those states, insurers also process prescription drugs through what’s called a pharmaceutical benefit manager, or PBM, to get a lower price. Such benefit managers act as intermediaries between drug manufacturers and health insurers, as well as between health plans and pharmacies. Centene already offers both of those services in many states.
In California, Bonta said, Centene companies leveraged its pharmacy management contracts to save their plan $2.70 per prescription refill over a two-year period. . But Centene and its PBM did not disclose or pass on these discounted fees to Medi-Cal.
According to Bonta, the $215 million payout is twice the value of Centene’s inflated price.
More than 20 states are investigating or have investigated Centene’s Medicaid drug bill. The company has agreed to make payments to at least 17 of these states: Arkansas, California, Illinois, Indiana, Iowa, Kansas, Louisiana, Massachusetts, Mississippi, Nebraska, New Hampshire, Nevada, New Mexico, Ohio, Oregon, Texas, and Washington, according to press releases and settlement documents from attorneys general in those states.
Download Modern Healthcare’s app to stay informed when there’s breaking industry news.
Centene provides benefits to 15.9 million Medicaid enrollees nationwide.
In California, Centene is an important political figure and has spent at least $5 million on lobbying, political donations, and other donations over the past five years, according to KHN’s analysis of filings. submitted to the secretary of state and the California Fair Political Practices Commission.
Last year, Centene protested the state’s Medi-Cal contract awards, which would dramatically cut their business in the nation’s most populous state. State health officials changed course after Centene and other insurers threatened to sue and partially restore their businesses.
An investigation by KHN last year found that the company, its subsidiaries, top executives and their spouses contributed more than $26.9 million to politicians in 33 states, to their political parties, and to nonprofit fundraising groups from January 1, 2015 through October 4, 2022. The company focuses its donations on states where they’re soliciting. Medicaid contracts and settle allegations that they over-billed taxpayers.
California Healthline senior correspondent, Bernard J. Wolfson, contributed to this report.
This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
