Health insurance giant CNC pays Texas $166 million in settlement, California officials pay attention 2022-09-22 13:40

Centene has not yet responded to media comments about the settlement, but it has denied wrongdoing in several settlements. Centene President and COO Brent Layton said last year that the Ohio and Mississippi settlements reflect the company's commitment to making health care a local, simple and transparent service and allow it to continue to focus on providing high-quality services to members.

Kaiser Health News, a health news media, first reported in April that officials in several states, including California, were investigating Centene. Florida and South Carolina have signed legal agreements with Mississippi-based law firm Liston & Deas, which represents other states, including Texas, in handling investigations into Centene's drug price overcharging.

Despite complaints from multiple public sector customers, the settlements did not end Centene's business relationship with the public sector. In Ohio and Mississippi, the company still obtained subsequent key medical management contracts after the settlements.

"You're going to see more and more recognition that this is a big part of our nation's drug affordability problem," said Erin Trish, an associate professor at the University of Southern California School of Pharmacy. "This is actually a poorly run industry that has been hiding behind a veil of opacity and secrecy for about a decade."

Medicaid is Centene's cash cow. The company is the largest Medicaid managed care insurer in the U.S., with 15.4 million policyholders.

Several states have filed charges against Centene's pharmacy manager business, alleging it overcharged Medicaid plans for prescription drugs and pharmacy services.

While it's still unclear exactly which states have filed the claims, Centene has settled with Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas and Washington for a total of $475 million, according to news releases from those state attorneys general and settlement documents.

The Texas settlement is not expected to be Centene's final payout. According to the company's filing with the U.S. Securities and Exchange Commission in July, it wrote that it is "discussing a final solution to the drug billing issue with other states." But it did not specify which states. However, according to the information, it has set aside $1.25 billion for a settlement in 2021 for the same issue.