Centene to Pay $72 Million to Resolve Allegations by Illinois and Arkansas

Recently, Centene Corporation reached multimillion dollar settlements with the states of Illinois and Arkansas for allegedly overcharging state Medicaid programs for prescriptions. Under the Illinois agreement, Centene will pay $56.7 million in two installments over the next 12 months. Under the Arkansas agreement, Centene will pay $15.2 million.

Under an investigation conducted by the Illinois Attorney General, Centene’s subsidiaries delivered pharmacy benefits to Illinois state agencies and allegedly submitted inaccurate pharmaceutical reimbursement requests that did not accurately disclose the cost of pharmacy services, nor did they disclose available pharmaceutical discounts. The reimbursement requests also allegedly improperly inflated dispensing fees.

Arkansas’ case was similar – Arkansas Medicaid tasked Centene’s subsidiary Envolve with helping manage its prescription drug program. Envolve then subcontracted its responsibilities for the payment of pharmacies to CVS Caremark. When Envolve reported to Arkansas Medicaid the costs paid to pharmacies for the drugs, Envolve reported inflated amounts of pharmacy costs by failing to disclose significant discounts in ingredient costs and dispensing fees the company received under the Envolve-CVS subcontract. This conduct took place in 2017 and 2018 and ended with the termination of the subcontract.

As is typical, Centene denied liability in both cases. Additionally, Centene has reserved additional money for other potential settlements.

These are the third and fourth settlements Centene has reached with states this year for this alleged conduct – Ohio ($88 million) and Mississippi ($55 million) announced settlements earlier this year.

Statements by Involved Parties

“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 said in a statement. “Importantly, this allows us to continue our relentless focus on delivering high-quality outcomes to our members.”

“I have successfully fought predatory pharmacy benefit managers in the nation’s highest Court, and I continue to hold these providers accountable for gouging Arkansans with unreasonably high costs for their prescriptions,” said Arkansas Attorney General Leslie Rutledge. “I will always fight to protect Arkansans, and this settlement with Centene is a big step in repairing the damage it did by taking advantage of Arkansans.”

“Pharmacy benefit managers are part of a larger issue, which is the accessibility and affordability of prescription drugs,” Illinois Attorney General Kwame Raoul said. “No one should have to choose between paying for basic necessities or costly but essential medications. My office is continuing to investigate pharmacy benefit managers operating in Illinois because I am committed to stopping unfair and unlawful conduct by PBMs and drug companies.”