Centene will pay $143 million to settle allegations from attorneys general in two states that a pharmacy benefit manager subsidiary misrepresented costs to obtain Medicaid overpayments.
Ohio's attorney general Dave Yost filed suit against Centene in March alleging that its Envolve Pharmacy Solutions subsidiary failed to accurately represent costs to the Ohio Department of Medicaid and that the PBM would submit reimbursement requests for amounts that had already been paid by third parties.
A similar investigation was also conducted in Mississippi. Centene will pay $88 million to Ohio and $55 million to Mississippi to resolve the case, with Yost's lawsuit to be dismissed.
Centene claims no fault in that arrangement and denies liability in the settlement, the insurer said. Centene added that it is in discussions with a plaintiff's group to resolve similar allegations in other states and has recorded a reserve estimate of an additional $1.1 billion related to this issue.
The allegations date back to 2017 and 2018, Centene said. However, the insurer in 2019 reconfigured its PBM operations to provide greater transparency. Envolve will operate as an administrative services provider and not a PBM to simplify operations in the pharmacy benefit, Centene said.
"We respect the deep and critically important relationships we have with our state partners," said Brent Layton, Centene's president of health plans, markets and products, in a statement.
"These agreements reflect the significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent. Importantly, putting these issues behind us allows us to continue our relentless focus on delivering high-quality outcomes to our members," Layton said.
Yost has been an outspoken critic of PBMs and said in a statement Monday that since his office has been able to "untangle this scheme … the alarm bells should be ringing for anyone using similar tactics.”
“Centene took advantage of all of us who pay taxes to care for the most vulnerable Ohioans,” Yost said. “This settlement is the big first step Centene is taking to repair Ohio's trust and it’s my hope they continue on this path of good faith.”
Mississippi Attorney General Lynn Fitch said in a statement that the settlement "makes clear that the days of hiding behind a convoluted flow of money and numbers are over."