Centene Corp. has agreed to pay greater than $215 million to California over allegations it overcharged the state for pharmacy providers — the largest payout up to now by the nation’s largest Medicaid insurer over its drug pricing practices.
The settlement introduced Wednesday makes California a minimum of the seventeenth state to settle pharmacy billing claims totaling $939 million with the St. Louis-based insurance coverage big. Centene reported $144.5 billion in income in 2022, up 15% from the earlier yr.
Investigators with the state Department of Justice discovered that Centene’s subsidiaries reported inflated drug prices and charges in offering prescribed drugs to sufferers in Medi-Cal, the state’s Medicaid insurance coverage program for folks with low incomes and disabilities, from January 2017 to December 2018.
“When companies overcharge the Medi-Cal system, it drains valuable resources from the people who rely on this care,” Attorney General Rob Bonta, a Democrat, stated in a press release.
As it has in earlier settlements, Centene denied wrongdoing. Within California, the insurer operates two subsidiaries: California Health & Wellness and Health Net, which collectively present protection to round 2 million Medi-Cal sufferers statewide.
“This no-fault agreement reflects the significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent,” Centene stated in a press release emailed to KHN.
Most states contract with personal insurance coverage firms similar to Centene to cowl folks of their state Medicaid packages, that are collectively paid for by state and federal taxpayers. In a lot of these states, the insurance coverage firm additionally handles prescription drugs by what is known as a pharmacy profit supervisor, or PBM, to get decrease costs. Such profit managers act as intermediaries between drugmakers and well being insurers and likewise between well being plans and pharmacies. Centene has supplied each these providers in a number of states.
In California, Bonta stated, Centene’s firms leveraged its pharmacy administration contracts to avoid wasting its plans $2.70 per prescription drug declare over the two-year interval. But Centene and its PBM did not disclose or move on these discounted charges to Medi-Cal.
The $215 million settlement quantities to twice the worth of Centene’s inflated costs, in response to Bonta.
More than 20 states are investigating or have investigated Centene’s Medicaid pharmacy billing. The firm has agreed to pay settlements to a minimum of 17 of these states: Arkansas, California, Illinois, Indiana, Iowa, Kansas, Louisiana, Massachusetts, Mississippi, Nebraska, New Hampshire, Nevada, New Mexico, Ohio, Oregon, Texas, and Washington, in response to information releases and settlement paperwork from attorneys normal in these states.
Centene offers advantages to 15.9 million Medicaid enrollees nationwide.
In California, Centene is a key political participant and has spent a minimum of $5 million on lobbying, political donations, and different contributions during the last 5 years, in response to a KHN evaluation of filings with the secretary of state and California Fair Political Practices Commission.
Last yr, Centene protested the state’s Medi-Cal contract awards, which might have considerably reduce its enterprise within the nation’s most populous state. State well being officers modified course after Centene and different insurers threatened lawsuits and partially restored a few of its enterprise.
A KHN investigation final yr discovered that the corporate, its subsidiaries, its prime executives, and their spouses contributed greater than $26.9 million to state politicians in 33 states, to their political events, and to nonprofit fundraising teams from Jan. 1, 2015, by Oct. 4, 2022. The firm targeted its giving on states the place it has been wooing Medicaid contracts and settling accusations that it overbilled taxpayers.
California Healthline senior correspondent Bernard J. Wolfson contributed to this report.
This story was produced by KHN, which publishes California Healthline, an editorially impartial service of the California Health Care Foundation.