Ohio AG sues Centene, alleging misrepresented pharmacy expenses cost Medicaid millions

Ohio Attorney Common Dave Yost filed a lawsuit this week versus well being insurance company Centene, alleging that enterprise subsidiary Buckeye Health and fitness Strategy utilized a world-wide-web of subcontractors for the provision of pharmacy added benefits in buy to misrepresent pharmacy charges, ensuing in hundreds of thousands of dollars of overpayments by the Ohio Division of Medicaid.

Yost claimed in a assertion on Thursday that Centene materially breached its obligations to the condition Medicaid software and to the condition as a entire, calling it a “conspiracy” and a “complicated plan” to get Medicaid payments by misleading implies.

The Ohio Division of Medicaid administers a clinical help plan that supplies coverage to about 2.9 million Ohioans, and it does so by the use of Managed Treatment Businesses (MCOs), this kind of as Buckeye Health and fitness Strategy, which administered its pharmacy advantage via sister companies Envolve Health and fitness Answers and Health and fitness Internet Pharmacy Answers.

The follow of subcontracting to extra than a person Pharmacy Benefit Supervisor elevated concerns about Buckeye Health and fitness Plan’s enterprise techniques and, in the end, Centene’s.

The Business office of the Attorney Common is alleging breaches of agreement, which includes filing reimbursement requests for quantities currently paid out by third parties failing to precisely disclose to ODM the legitimate price of pharmacy providers, which includes the disclosure of savings been given and artificially inflating dispensing costs.

As anticipated, the lawsuit been given pushback from Centene, precisely Envolve Health and fitness, which claimed the allegations are “unfounded” and pledged to aggressively protect its pharmacy providers.

“Envolve’s pharmacy contracts with the Point out are reviewed and pre-authorized by condition organizations before they at any time go into effect,” the enterprise claimed in a assertion. “Furthermore, these providers saved hundreds of thousands of tax-payer dollars for Ohioans from sector-based pharmaceutical pricing.”

The lawsuit was filed less than seal owing to a confidentiality and nondisclosure agreement.

THE Larger Pattern

In 2020, following including ten million customers, Centene observed whole-year earnings of $111 billion, symbolizing 49% expansion and altered diluted earnings for every share of $5, up 13% around the prior year.

Centene’s fourth quarter revenues were $28.3 billion, an maximize of fifty% around the fourth quarter of 2019, and altered diluted earnings for every share were $.46, in comparison to $.73 past year.

CFO, treasurer and executive vice president Jeff Schwaneke claimed complete revenues grew by $9.four billion around the fourth quarter of 2019 owing to the acquisition of WellCare and expansion in the Medicaid and Health and fitness Insurance plan Marketplace enterprise. 

This expansion also includes the influence from the suspension of Medicaid eligibility redeterminations and the reinstatement of the well being insurance company payment in 2020 – partly offset by the divestiture of Centene’s Illinois well being plan and retroactive condition top quality-rate changes and threat-sharing mechanisms.

In January, Centene and Magellan Health and fitness entered into a definitive merger agreement less than which Centene will acquire Magellan Health and fitness for $2.2 billion. As a final result of the transaction, Centene will create a person of the nation’s premier behavioral well being platforms throughout 41 million one of a kind customers.

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