Lawsuit Accusing Company Of Overbilling Ohio Medicaid Settled

COLUMBUS, OH — Centene Corporation has agreed to pay Ohio $88.3 million to settle a lawsuit accusing the company of overbilling Ohio Medicaid.

Ohio Attorney General Dave Yost accused Centene, a pharmacy benefit manager, of overbilling the Ohio Department of Medicaid for pharmacy services, and for misrepresenting the costs of pharmacy services, including the price of prescription drugs.

As part of the settlement, Centene admitted to no wrong doing in any of the accusations, which will be dismissed with the payment.

Yost believes the $88. million payment is the largest settlement secured by a state attorney general against a pharmacy benefit manager.

“Centene used sophisticated moves to bill unearned dollars – moves known only at the top levels of health care companies,” Yost said in a statement. “It has taken a huge effort by my team to untangle this scheme — and now that we know how it works, the alarm bells should be ringing for anyone using similar tactics.”

Most prescription-drug plans in Ohio are managed by a pharmacy benefit manager (sometimes called a PBM). The managers serve as middlemen in control of prescription-drug costs, deciding which medications are covered by health insurance companies.

Yost began investigating pharmacy benefit managers in 2018, when he was still state auditor. He suspected inflated pricing was gouging Ohioans, he said.

“Centene took advantage of all of us who pay taxes to care for the most vulnerable Ohioans,” Attorney General Yost said. “This settlement is the big first step Centene is taking to repair Ohio's trust and it’s my hope they continue on this path of good faith.”

In 2019, Centene restructured its pharmacy benefits operations to create "a more transparent relationship" between its health plans and pharmacy benefits manager, the company said in a statement.

Going forward, Envolve will operate as an administrative service provider, not a PBM, on behalf of Centene's local health plans to further simplify our pharmacy operations.

"We respect the deep and critically important relationships we have with our state partners," said Brent Layton, Centene's president of health plans, markets and products. "These agreements reflect the significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent. Importantly, putting these issues behind us allows us to continue our relentless focus on delivering high-quality outcomes to our members."