Centene Corp. agreed to pay settlements to Ohio and Mississippi to resolve claims that it inflated pharmacy costs, and the health insurer reserved $1.1 billion to resolve similar claims in other states.
Centene, the country’s largest seller of Medicaid health plans, will pay $88 million to Ohio and $55 million to Mississippi, while denying any liability for the practices leading to the settlement, the company said Monday in a statement.
Ohio’s attorney general sued Centene in March, alleging that the company used a web of affiliated contractors to overcharge the state for the cost of medications provided to Medicaid beneficiaries. That litigation will be dismissed as part of the settlement, Centene said.
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PBMs negotiate discounts with drug suppliers and administer pharmacy networks for health plans. But the complexity of the arrangements has led to scrutiny of the business in recent years, as employers and states seek more transparency around prescription costs.
After investigating the state’s Medicaid pharmacy benefits expenses for years, Ohio recently restructured the way it contracts for PBM services.
Authorities in several other states, including Arkansas and Kansas, are investigating PBM practices and working with some of the outside attorneys involved in the Ohio lawsuit, according to public records.
Centene said it had reserved an additional $1.1 billion related to this issue and was in talks with plaintiffs led by the law firms Liston & Deas and Cohen Milstein to resolve similar concerns in other states.
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