October 01, 2021

Centene Corp. has agreed to pay more than $71 million to resolve investigations in two states into the health insurer’s billing practices.

The settlements, announced on Thursday in statements from the attorneys general in Illinois and Arkansas, are related to claims that Centene’s pharmacy-benefit management business inflated drug costs. The company has resolved similar disputes with Ohio and Mississippi and has reserved $1.1 billion to cover the claims, it said in June.

Centene is the largest provider of Medicaid managed-care health plans in the U.S. It contracted with Illinois and Arkansas to manage pharmacy benefits for state programs.

“This no-fault agreement reflects the significance we place on addressing their concerns and our ongoing commitment to making the delivery of health care local, simple and transparent,” Centene said in a statement provided by a spokesperson.

Shares of the St. Louis-based company declined 1.5% on Thursday in New York.

Pharmacy-benefit managers, or PBMs, negotiate discounts with drug suppliers on behalf of health plans and process prescriptions. The business has come under greater scrutiny in recent years because of the complexity of the arrangements and the potential for PBMs to pocket a share of the discounts or fees they receive.

Some states including Ohio have restructured how they contract for pharmacy benefits in programs like Medicaid, the safety net insurance for low-income Americans, to add more transparency.

Illinois Attorney General Kwame Raoul’s office said that Centene “allegedly submitted inaccurate pharmaceutical reimbursement requests that failed to accurately disclose the cost of pharmacy services,” and inflated other fees. He said in a statement that his office is still looking into PBMs operating in Illinois. Centene will pay more than $56 million to resolve the Illinois claims, Raoul said.

Arkansas Attorney General Leslie Rutledge said “this settlement with Centene is a big step in repairing the damage it did by taking advantage of Arkansans” in a statement. The company will pay more than $15 million to resolve the Arkansas claims, which covered conduct by Centene subsidiary Envolve in 2017 and 2018, Rutledge’s office said.

The complete story can be accessed here. (Subscription required.)