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Ohio Sues Multiple Centene Entities for Breach of Medicaid Contracts: Centene Corp. used layers of Pharmacy Benefit Managers to jack up prices for tax payer-financed care, Yost says

3/11/2021

(COLUMBUS, Ohio) — Ohio has sued health-care giant Centene Corp. for an elaborate scheme to maximize company profits at the expense of the Ohio Department of Medicaid (ODM) and the state of Ohio, Attorney General Dave Yost announced today. 

The lawsuit alleges that Centene subsidiary Buckeye Health Plan utilized a web of subcontractors for the provision of pharmacy benefits in order to misrepresent pharmacy costs, resulting in millions of dollars of overpayments by ODM.

“Corporate greed has led Centene and its wholly owned subsidiaries to fleece taxpayers out of millions. This conspiracy to obtain Medicaid payments through deceptive means stops now,” Attorney General Yost said. “My office has worked tirelessly to untangle this complex scheme, and we are confident that Centene and its affiliates have materially breached their obligations both to the Department of Medicaid and the state of Ohio.”

The Department of Medicaid administers a medical assistance plan that provides coverage to about 2.9 million Ohioans, and it does so through the use of Managed Care Organizations (MCOs). One such MCO, Centene’s Buckeye Health Plan, administered its pharmacy benefit via sister companies Envolve Health Solutions and Health Net Pharmacy Solutions. The practice of subcontracting to more than one Pharmacy Benefit Manager (PBM) raised questions about Buckeye Health Plan’s business practices and, ultimately, Centene’s.

The Office of the Attorney General, through outside counsel, conducted a thorough investigation of these practices, finding significant breaches of contract. Notably, these include:

  • Filing reimbursement requests for amounts already paid by third parties.
  • Failing to accurately disclose to ODM the true cost of pharmacy services, including the disclosure of discounts received.
  • Artificially inflating dispensing fees.
“Centene’s actions are deeply concerning and have a direct effect on the most vulnerable Ohioans,” Attorney General Yost said. “Centene has broken trust with the state of Ohio, and I intend to hold this company accountable for its deceptive practices.

“Today’s lawsuit is a message to corporations nationwide that Ohio will not allow them to impermissibly profit at the expense of our taxpayers,” Yost said.

The lawsuit was filed on March 11th in the Franklin County Court of Common Pleas.

The lawsuit was filed under seal due to a confidentiality and nondisclosure agreement on March 11th in the Franklin County Court of Common Pleas.

MEDIA CONTACT:
Luke Sullivan: 614-270-2662

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