Health insurance giant Centene Corp. has agreed to pay Texas $165.6 million to settle allegations it overcharged the state’s Medicaid program for pharmacy services, a deal closely watched by California officials.
This is the largest known payout for the nation’s largest Medicaid insurer over its drug pricing practices.The deal was signed on July 11, but it wasn’t until Monday that Kaiser Health News acquired copy of settlement Go through the Texas public records request and start asking questions.
The agreement makes Texas at least the 12th state to settle a pharmacy billing claim with St. Louis-based Centene.
Centene did not respond to multiple requests for comment about the Texas settlement.But it denies wrongdoing in several settlements, Centene president and chief operating officer Brent Leyton said last year The Ohio and Mississippi settlements reflect the company’s “commitment to delivering localized, simple and transparent healthcare” and allow it to continue its “relentless focus on delivering high-quality outcomes for our members.”
Most states contract with private insurance companies such as Centene to provide coverage to Medicaid recipients with disabilities or low incomes. State Medicaid is jointly paid by state and federal taxpayers. In many of these states, insurers process Medicaid prescriptions for lower prices through so-called pharmacy benefit managers. Such benefits administrators act as An intermediary between drugmakers and health insurers, and between health plans and pharmacies. Centene offers both services in multiple states.
Medicaid provides a huge springboard for Centene’s growth and revenue.The company is the largest Medicaid managed care insurer in the U.S. 15.4 million registrants Nationwide.
Multiple states have filed charges against Centene’s pharmacy manager business, alleging that it overbilled Medicaid for prescription drugs and pharmacy services. State totals are not known to the public. According to press releases and settlement documents from those state attorneys general, Centene has settled with Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas and Washington for a total of $475 million. The other three states and their settlement amounts have yet to be determined by Centene or the states themselves.
The company’s first settlements are in 2021 with Ohio and Mississippi. The $88 million Centene agreed to pay to Ohio is the largest public settlement before its deal with Texas.
Details of how the company overcharged states or failed to meet the terms of its contracts were not disclosed in the settlement. Joey Mattingly, an associate professor at the University of Maryland School of Pharmacy. “There are many ways you can overcharge Medicaid,” Mattingly said. “It’s amazing that there are so many states.”
The Texas settlement is not expected to be Centene’s final payout.in a July filing In its work with the SEC, Centene wrote that “final resolution” of the drug bills in “other affected states” is under discussion, without specifying those states. It set aside $1.25 billion in 2021 to settle settlements with pharmacy benefit managers.
Other states could include California, which is investigating Centene’s role in providing pharmacy benefits to its Medicaid participants, First reported by KHN in AprilFlorida and South Carolina have signed legal agreements with Mississippi-based Liston & Deas, which handles pharmacy benefit investigations into Centene on behalf of other states, including Texas.
Still, the settlement did not result in the end of the business relationship. In Ohio and Mississippi, the company signed key state managed care contracts after resolving pharmacy benefit allegations.
Just last week, Centene announced that Texas had renewed the contract of the company’s Texas affiliate, Superior HealthPlan, to provide healthcare to foster children and teens, despite a July settlement over its prescription drug management. . Centene did not disclose the financial terms of the new contract.
An undisclosed portion of the Texas prescription drug settlement is expected to go to the federal government because of its role in helping fund Medicaid. Centene’s deal with Texas calls for the company to pay half of the settlement amount in August.
Centene may agree to pay more to Texas than Ohio because of the high volume of prescription drug claims there, Antonio Ciaccia said, 3 Axis Advisora consulting firm that has worked with Liston & Deas on drug billing.
“The results we have achieved in this case send a clear message to providers that Texas wants its Medicaid partners to be transparent as required by Texas law,” Artie said. .General Ken Paxton in a statement. The office did not clarify why the settlement was not disclosed earlier.
Overall, pharmacy benefit managers are under increasing scrutiny and criticism.Federal Trade Commission announced in June It is launching an investigation into the pharmacy benefit management industry and its impact on consumers’ access to prescription drugs and the cost of drugs.
“You’re going to see more and more recognition that this is an important part of the drug affordability issue in our country,” said Erin Tracy, an associate professor at the USC School of Pharmacy. “It’s actually a fairly integrated and poorly functioning industry, hidden for a decade or so under a veil of opacity and secrecy.”
This story is made by KHNrelease California Healthlineeditorial independent service California Healthcare Foundation. Rebecca Grapevine contributed to this article.
