In September 2022, Massachusetts Attorney General Maura Healey announced a $14 million settlement with Centene over allegations that the company overcharged the MassHealth Medicaid program millions of dollars for pharmacy benefits and services provided by subsidiaries.
The settlement follows an investigation by Attorney General Healey’s office into the operations of Centene in the Commonwealth, including its pharmacy benefit manager (PBM) Envolve Pharmacy Solutions, Inc. The investigation found irregularities in the pricing and reporting of pharmacy benefits and services to MassHealth by Centene’s subsidiary companies.
As a PBM for Centene-owned CeltiCare’s Medicaid managed care organization, Envolve administered pharmacy benefits for MassHealth members. At the time of the alleged actions, CeltiCare provided coverage to about 42,000 Medicaid members in Massachusetts. It withdrew from the market in 2017.
Attorney General Healey alleges that Centene and Envolve did not disclose or pass on some of the retail discount fees to MassHealth, which ultimately resulted in inflated fees and drug costs being reported to the Commonwealth.
“This settlement is a significant result in our work to protect taxpayer dollars and the integrity of our MassHealth program,” said Attorney General Healey. “We are pleased to secure these funds to help control Medicaid costs and ensure that state resources are directed to the best possible uses in our health care system.”
“Managing the MassHealth program with integrity has been a core objective of this administration in order to ensure that public dollars are efficiently and effectively utilized,” said Health and Human Services Secretary Marylou Sudders. “I appreciate the Attorney General’s commitment to ensuring that MassHealth is fairly charged for benefits while we serve some of the most vulnerable in our state.”
Centene is the largest Medicaid managed care firm in the United States, with more than 15 million members. The Massachusetts settlement is the latest in a series of settlements Centene has reached around the country with various state Medicaid programs. In a July 26, 2022, filing with the United States Securities and Exchange Commission (SEC), Centene said it had reached no-fault agreements with 11 states, all related to Envolve Pharmacy Solutions provided from 2017 and 2018. Centene set aside $1.25 billion in a reserve in the second quarter of 2021 to pay for future settlements.
As of the writing of this article, ten such settlements have been made public: Texas ($165.6 million), Ohio ($88.3 million), Illinois ($56.7 million), Mississippi ($55.5 million), Kansas ($27.6 million), New Hampshire ($21.1 million), Washington ($19 million), New Mexico ($13.7 million), and Arkansas ($15.2 million).