Massachusetts has become the latest state to reach an agreement with health insurance giant Centene Corp. in connection with allegations that he had inflated the cost of pharmacy services under the state Medicaid program, according to KHN.
Massachusetts Attorney General Maura Healy said Centene, the country’s largest Medicaid insurance company, will pay $14.2 million. An official announcement is expected later on Thursday.
“This settlement is an important outcome of our work to protect taxpayer money and the integrity of our MassHealth program,” Healy said in a statement. “We are pleased to receive these funds to help control Medicaid spending and ensure that public resources are directed to the best possible use in our healthcare system.”
Senten on Wednesday denied wrongdoing in Massachusetts, as he did in previously announced agreements. Earlier this month, KHN reported that in July, Centene agreed to pay Texas almost $166 million.
“This no-blame agreement reflects the importance we place on addressing their concerns and our ongoing commitment to making healthcare local, simple and transparent,” Senten said in an emailed statement to KHN. “Importantly, this allows us to continue to relentlessly focus on delivering high quality results to our participants.”
Centene provides health coverage to 15.4 million Medicaid members nationwide by contracting with states to provide coverage for people with disabilities or low-income families. The St. Louis insurance company receives about two-thirds of its income from Medicaid, which is jointly funded by state and federal taxpayers.
In many states, insurance companies such as Centene also distribute prescription drugs to Medicaid members through what is known as a pharmacy benefits manager. These benefit managers act as intermediaries between drug manufacturers and insurance companies, and as intermediaries between health plans and pharmacies.
Centene subsidiary CeltiCare offered coverage to Massachusetts Medicaid members until the state began reviewing its program. Centene also administered drug benefits for the state’s Medicaid MassHealth program, according to the Attorney General’s Office.
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An audit by Healey’s office found “irregularities in pricing and reporting on pharmacy benefits and services” by Centene’s pharmacy benefits manager, Envolve Pharmacy Solutions, it said in a statement.
Several states sorted out with a pharmacy manager, Centene, over allegations that it overcharged their Medicaid programs for prescription drugs and pharmacy services. But the total number of states is not publicly known because many of the settlement talks are taking place behind closed doors. Some states, such as California, investigated the companyfirst reported to KHN in April.
Prior to signing the Massachusetts Agreement, Centene settled accounts with Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New MexicoOhio, Texas and Washington totaling $475 million, according to press releases and settlement documents from those states’ attorneys general. The settlement agreement in Massachusetts, which was signed on Sept. 23, brings the total settlement of Centene’s pharmacy services to at least $489 million. Other states have also settled with Centene, but the settlement amounts – and the states themselves – have not been publicly disclosed.
In 2021, Centene provided $1.25 billion to settle settlements with pharmacy managers in “affected states,” according to a July filing with the U.S. Securities and Exchange Commission that did not specify how many states.
Florida and South Carolina signed legal agreements with the Mississippi-based firm Liston & Deas, which represented the interests of other states in the investigation of their drug practices regarding Centene.
Pharmacy benefit managers in general are receiving increasing attention and criticism. In June, the Federal Trade Commission announced that it was launching an investigation into the pharmacy benefit management industry and its impact on consumer access to prescription drugs and the cost of drugs.
Kaiser Health News is a national health policy news service. It is an editorial independent program of the Henry J. Kaiser Family Foundation and not affiliated with Kaiser Permanente.
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