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
December 07, 2021 03:21 PM

Centene hands over millions to another state as Medicaid PBM oversight rises

Nona Tepper
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    Centene Corporation_i_i.jpg
    Kris Tripplaar/Sipa USA

    Centene will pay Kansas $32.4 million to resolve the fifth—but not final—allegation that the St. Louis-based insurer overcharged state Medicaid programs for drugs.

    The company has reserved $1.25 billion for future settlements related to its Envolve pharmacy benefit manager, which it has since restructured to serve solely as a third-party administrator for processing claims. The nation's largest Medicaid carrier has so far paid a combined $214 million in settlements to Arkansas, Illinois, Mississippi and Ohio over its now-defunct PBM. Kansas joins more than a dozen other states that hired the law firm Liston & Deas to investigate PBMs' Medicaid billing and clawback practices, which the states say sidestep bans on spread pricing.

    Centene has Medicaid contracts in 30 states and covers 14 million enrollees.

    The for-profit company is now on the hunt for a new PBM to manage its $30 billion in annual drug spending and plans to evaluate proposals next year then have a new contractor take over the operations by 2024. In the meantime, Centene is offloading its drug-management platforms. During the third quarter, the insurer paid $229 million to transition from using RxAdvance, a company that offers an automated drug-pricing tool.

    Kansas Attorney General Derek Schmidt (R) did not respond to interview requests about the settlement deal, which does not represent an admission of guilt on the insurers' part.

    "We take seriously our role of protecting Kansas taxpayers and finding and stopping fraud and overpayments in the state Medicaid program," Schmidt said in a news release. "Today's settlement involving PBM practices is the first of its sort in Kansas and other investigations continue."

    Centene will continue to participate in Kansas' Medicaid program—known as KanCare—with CVS Health's Aetna and UnitedHealth Group's OptumRx. The three companies control 75% of U.S.' prescription drug claims. Consolidation within the PBM industry has made it hard for regional health plans to find PBMs not owned by their competitors. Many of the startups promising independent operations are simply white glove these PBMs services provided through group purchasing organizations. PBMs enjoyed gross profits of 12% over three years, reaching $28 billion in 2019, according to a report the PBM Accountability Project released last week.

    CVS Health, UnitedHealth Group and Centene also handled prescription drugs for Ohio's Medicaid program when the state's auditor concluded in 2018 that its middlemen charged $225 million more for drugs than they paid to pharmacies. Next year, Ohio plans to operate its own PBM that the state expects will save $240 million a year.

    Centene must rebid to retain its contract with KanCare once its current contract expires in 2023. The company now gives Kansas access to all its pharmaceutical transaction data, from the point of sale through reimbursement, according to the settlement agreement.

    "We respect the deep and critically important relationships we have with our state partners," a Centene spokesperson wrote in an email. "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."

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

    States are stepping up their oversight of PBM practices in Medicaid and beyond, said Antonio Ciaccia, president of drug-pricing watchdog 3 Axis Advisors and CEO of 46brooklyn Research.

    "Over the last four years, we're seeing an intense amount of accountability and scrutiny, thanks in large part to the liberation of drug pricing data," Ciaccia said. "No matter how you slice it, that ability to assess what we're buying, and for what price we're buying it at, not only holds the PBMs accountable, but it holds the entire drug supply chain accountable because everybody profits off of the excessive complexity of this system."

    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
    UnitedHealth_Group_AP_fullsize_i_i_i copy_i.png
    Feds, states end fight over $13B UnitedHealth-Change Healthcare deal
    dirksen.jpg
    Outcome Health investor lost 90% when company fell
    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