Centene Reaches $13.7 Million Settlement with New Mexico for Allegedly Overcharging State Medicaid Program
Earlier this year, Centene reached a $13.7 million settlement with the state of New Mexico over allegations that the company overcharged the state’s Medicaid program (Centennial Care) by “layering fees” and failing to pass on discounts to the state Medicaid program.
New Mexico Attorney General Hector Balderas investigated Centene’s actions upon referral from the Office of the State Auditor, in collaboration with the New Mexico Human Services Department. Centene’s wholly-owned subsidiaries (including Envolve Pharmacy Solutions and Western Sky Community Care) provided pharmacy benefits and services to Centennial Care, which provides healthcare services and medications to nearly one million New Mexicans, since 2019.
As part of the settlement, Centene will provide pricing transparency on all pharmaceutical benefits and services provided to the state’s Medicaid program, as well as an assurance of discontinuance related to the improper actions. As we often see, the agreement does not include any admission of liability or wrongdoing by Centene.
“We respect the deep and critically important relationships we have with our state partners. 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. Importantly, this allows us to continue our relentless focus on delivering high-quality outcomes to our members,” Centene said in an emailed statement. In June 2021, Centene noted in an 8-K filing with the Securities and Exchange Commission that it had set aside $1.1 billion to resolve future potential settlements.
“Vulnerable New Mexicans should not have to worry about paying surging prescription drug costs,” said Attorney General Balderas. “This investigation was necessary to shine a light on industry practices, ensure greater accountability and return $13.7 million back to New Mexico.”
Attorney General Balderas and New Mexico Superintendent of Insurance Russell Toal plan to continue working together to continue investigating the pharmaceutical industry to identify opportunities for transparency and increased consumer protections. This is in line with the Federal Trade Commission’s recent decision to investigate some of the largest companies in the industry, including CVS Caremark, Express Scripts, Optum Rx, and Humana, among others.
Centene’s Other Settlements
Centene is the largest Medicaid managed care organization in the United States and it has settled a number of similar lawsuits around the country, including more than $236 million to five states – Arkansas, Illinois, Mississippi, New Hampshire, and Ohio. The largest settlement thus far is $88.3 million paid to the state of Ohio.