Centene settles allegations it overcharged Medi-Cal for $215M

Centene has reached its largest settlement yet over allegations from multiple states that it overcharged Medicaid programs for prescription drugs.

The government insurance giant settled with California for $215 million, Attorney General Rob Bonta announced Wednesday. The settlement resolves allegations that the company falsely reported prescription drug costs in two of its managed care plans.

The alleged actions run afoul of the False Claims Act, Bonta's office said.

“When companies overcharge the Medi-Cal system, it drains valuable resources from the people who rely on this care. Today’s settlement is a win—it brings resources directly back to our state," Bonta said in the release. "At the California Department of Justice, we will continue using every tool we have to fight for California’s vulnerable communities.”

A California DOJ investigation found that Centene took advantage of its pharmacy benefit management contracts to save its managed care plans on drug costs. However, the insurer failed to disclose those savings or pass them on to Medi-Cal, the state's Medicaid program.

California Health & Wellness and HealthNet, the two Centene plans, then reported inflated figures to Medi-Cal for the costs they incurred in paying out prescription claims.

The $215 million settlement recovers twice the inflated prices Centene is alleged to have falsely reported, according to the announcement.