Skip to main content
Sister Publication Links
  • ESG: THE IMPLEMENTATION IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Digital Health
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Unwell in America
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Legal
February 09, 2023 04:25 PM

Centene agrees to pay $215M settlement to California in alleged Medicaid overbilling

Samantha Young, Kaiser Health News
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    billing_image_0_i.jpg
    Getty Images

    Centene Corp. has agreed to pay more than $215 million to California over allegations it overcharged the state for pharmacy services — the biggest payout to date by the nation’s largest Medicaid insurer over its drug pricing practices.

    The agreement announced Wednesday makes California at least the 17th state to settle pharmacy billing claims totaling $939 million with the St. Louis-based insurance giant. Centene reported $144.5 billion in revenue in 2022, up 15% from the previous year.

    Investigators with the state Department of Justice found that Centene’s subsidiaries reported inflated drug costs and fees in providing prescription drugs to patients in Medi-Cal, the state’s Medicaid insurance program for people with low incomes and disabilities, from January 2017 to December 2018.

    Not a Modern Healthcare subscriber? Sign up today.

    “When companies overcharge the Medi-Cal system, it drains valuable resources from the people who rely on this care,” Attorney General Rob Bonta, a Democrat, said in a statement.

    As it has in previous settlements, Centene denied wrongdoing. Within California, the insurer operates two subsidiaries: California Health & Wellness and Health Net, which together provide coverage to around 2 million Medi-Cal patients statewide.

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

    Most states contract with private insurance companies such as Centene to cover people in their state Medicaid programs, which are jointly paid for by state and federal taxpayers. In many of those states, the insurance company also handles prescription medications through what is called a pharmacy benefit manager, or PBM, to get lower prices. Such benefit managers act as intermediaries between drugmakers and health insurers and also between health plans and pharmacies. Centene has provided both those services in multiple states.

    In California, Bonta said, Centene’s companies leveraged its pharmacy management contracts to save its plans $2.70 per prescription drug claim over the two-year period. But Centene and its PBM failed to disclose or pass on these discounted fees to Medi-Cal.

    The $215 million settlement amounts to twice the value of Centene’s inflated prices, according to Bonta.

    More than 20 states are investigating or have investigated Centene’s Medicaid pharmacy billing. The company has agreed to pay settlements to at least 17 of those states: Arkansas, California, Illinois, Indiana, Iowa, Kansas, Louisiana, Massachusetts, Mississippi, Nebraska, New Hampshire, Nevada, New Mexico, Ohio, Oregon, Texas, and Washington, according to news releases and settlement documents from attorneys general in those states.

    Download Modern Healthcare’s app to stay informed when industry news breaks.

    Centene provides benefits to 15.9 million Medicaid enrollees nationwide.

    In California, Centene is a key political player and has spent at least $5 million on lobbying, political donations, and other contributions over the last five years, according to a KHN analysis of filings with the secretary of state and California Fair Political Practices Commission.

    Last year, Centene protested the state’s Medi-Cal contract awards, which would have significantly cut its business in the nation’s most populous state. State health officials changed course after Centene and other insurers threatened lawsuits and partially restored some of its business. 

    A KHN investigation last year found that the company, its subsidiaries, its top executives, and their spouses contributed more than $26.9 million to state politicians in 33 states, to their political parties, and to nonprofit fundraising groups from Jan. 1, 2015, through Oct. 4, 2022. The company focused its giving on states where it has been wooing Medicaid contracts and settling accusations that it overbilled taxpayers.

    California Healthline senior correspondent Bernard J. Wolfson contributed to this report.

    This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

    Related Articles
    Centene predicts big losses during Medicaid redeterminations
    Centene, Oak Street Health, Humana — here’s what went down at the 1st day of the J.P. Morgan health conference
    Centene fills out senior executive team with new president, COO
    Centene barred from growing some Medicare Advantage plans
    Centene to pay $166M to resolve Texas Medicaid fraud allegations
    Centene settles Medicaid fraud case with Washington state
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    gavel and stethoscope
    Federal judge blocks ACA preventative care requirement
    Dirksen 800x600.jpg
    Feds order Docs At The Door exec to pay $25M in Medicare fraud
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Dose Newsletter: Sign up to receive a late afternoon weekday roundup of that day’s breaking news and developments in healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Digital Health
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Unwell in America
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing