Centene Corporation recently agreed to settle another pharmacy benefit management case, this time in Kansas. The $27.6 million settlement was announced by Kansas Attorney General Derek Schmidt, who noted that the “settlement is the result of a years-long investigation into the company’s business practices undertaken by Schmidt’s office after a separate investigation in Ohio revealed PBMs were overbilling that state for their services.”
The attorney general’s office began investigating the business practices of pharmacy benefit managers after the Ohio investigations became public in 2019. In 2020, Schmidt’s office retained Liston & Deas, PLLC to assist with the investigation. The investigation revealed failures by Centene to accurately report pharmacy expenditures to state regulators, including failing to accurately report discounts it received from CVS-Caremark on certain retail pharmacy claims and artificially inflating dispensing-fee amounts reported to state regulators.
An opaque reporting system used by Centene made it difficult for the state to determine the nature and appropriateness of certain pharmacy transactions. The settlement covers the period between January 1, 2016, and November 12, 2021 (the date of the settlement). In addition to the agreed-upon settlement, Centene will pay the financial costs of the investigation that led to the nearly $27.6 recovery for Kansas. The aggregate amount that Centene will pay to Kansas is $32,456,498.26 and Centene will assist Kansas in calculating the appropriate allocation of the settlement amount, should the federal government assert a claim against it.
In the settlement document, Centene agrees to improve transparency by providing Kansas with access to all data necessary to track pharmaceutical transactions from the point of sale all the way through reimbursement.
“We take seriously our role of protecting Kansas taxpayers and finding and stopping fraud and overpayments in the state Medicaid program,” Schmidt said. “Today’s settlement involving PBM practices is the first of its sort in Kansas, and other investigations continue.”
As is typical in these settlements, Centene does not admit to any liability, wrongdoing, and/or violation of any federal or state statute or regulation or common law.
Other State Settlements
This settlement with Kansas follows prior settlements Centene reached with Arkansas and Illinois.