Allegations of overcharging Medi-Cal settled by Centene for $215 million

Allegations of overcharging Medi-Cal settled by Centene for $215 million the largest settlement for Centene have been agreed upon following allegations from numerous states regarding the company swindling Medicaid programs for prescription drugs. The big-name government insurance company settled with the state of California for a huge sum of $215M on Wednesday according to Rob Bonta (Attorney General).

Centene Corporation is a front-running healthcare company that states that it is dedicated to making a positive impact on the community’s health. The company was founded in 1984, nearly 4 decades ago, and is headquartered in St. Louis, Missouri, United States. The company made it to the Fortune 500 when it was ranked 26th two years ago. According to the company, it caters to 1 in 15 (6.7%) of the entire country’s population (including Medicare and Medicaid members along with families and individuals served by the TRICARE program. As of 2022 end, the company has over 83,200 employees.

This settlement puts to bed the allegations that Centene deceptively reported prescription drug costs in more than one of its managed care plans. According to Rob Bonta’s office, the suspected actions violate the False Claims Act. The managed care company thought of the settlement as adequate and reasonable.

In a press release, Rob Bonta stated, “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. At the California Department of Justice, we will continue using every tool we have to fight for California’s vulnerable communities.”

A California Department of Justice investigation took place, the results of which revealed that Centene had taken advantage of its pharmacy benefit management contracts to reduce the drug costs on its managed care plans. These savings were passed on to the Medicaid program of the state, Medi-Cal, and were not even not revealed by the insurer.

Two Centene plans; HealthNet, and California Health & Wellness later reported overstated numbers to Medi-Cal for the incurred costs in paying out the prescription claims. The savings per claim were quoted to be nearly $2.70 over a period of two years.

Over 20 states are currently investigating or have previously investigated the company’s Medicaid pharmacy billing. According to settlement documents and news releases, as of now, Centene has decided to settle with seventeen of the twenty states which are: Nebraska, California, Indiana, Kansas, Iowa, Arkansas, Illinois, Nevada, Lousiana, Mississippi, Texas, Massachusetts, Washington, New Hampshire, Ohio, New Mexico, and Oregon.

According to the announcement, the $215M settlement payment recovers double the inflated process that the company is alleged to have deceitfully reported. It also makes California no less than the 17th state to settle billing claims amounting to $939M with the insurance company.

Centene stated that the company valued its extremely important relationships with the states of the U.S. and it is devoted to promoting and providing transparent and simple healthcare. The company also stated a 2022 profit of $1.2B, translating to a per-share profit of $2.07 after revenue of $144.5B, which is a 15% increase from the previous year.

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