Centene admits no wrongdoing in the settlement, but will pay back twice the value of its inflated price reporting.
Centene Corp. will pay $215 million to resolve California False Claims Act allegations that two of its managed care subsidiaries inflated drug costs to extract money from Medi-Cal.
It's the latest settlement for St. Louis-based Centene, which manages benefits for nearly 16 million Medicaid recipients nationwide.
California Healthline reports that Centene and its subsidiaries are being investigated in more than 20 states for similar allegations of prescription drug overcharges and have so far paid back about $939 million to 17 states.
"Medi-Cal is a lifeline that provides access to free or affordable healthcare services for millions of Californians," California Attorney General Rob Bonta said Wednesday.
"When companies overcharge the Medi-Cal system, it drains valuable resources from the people who rely on this care. Today's settlement is a win — it brings resources directly back to our state."
Centene issued a statement saying: "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."
The Centene subsidiaries -- California Health & Wellness and Health Net -- manage Medi-Cal services for beneficiaries in more than 20 California counties.
An investigation by the California Department of Justice found that between in 2017 and 2018 the two managed care subsidiaries reported inflated figures for the costs they incurred in providing prescription drugs.
Investigators said Centene leveraged advantages in its pharmacy benefit manager contracts to save its managed care plans $2.70 per prescription drug claim over the two-years.
DOJ alleges that Centene and its PBM failed to disclose or pass on these discounted fees to Medi-Cal, which inflated fees and drug costs reported to California.
The $215.4 million settlement recovers twice the value of Centene's inflated price reporting.
“When companies overcharge the Medi-Cal system, it drains valuable resources from the people who rely on this care.”
California Attorney General Rob Bonta
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
The Centene subsidiaries -- California Health & Wellness and Health Net -- manage Medi-Cal services for beneficiaries in more than 20 California counties.
An investigation by the California DOJ found that between in 2017 and 2018 the subsidiaries reported inflated figures for the costs they incurred in providing prescription drugs.
Centene says the agreement 'reflects the significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent.'