Illinois will receive almost $56 million in a settlement with Centene, the largest Medicaid managed care organization in the U.S., as a result of an investigation into alleged inaccurate billing requests from its pharmacy benefit management (PBM) subsidiary Envolve.
In June, St. Louis-based Centene said it was putting aside $1.1 billion for potential settlements like the one with Illinois after settling with Ohio and Mississippi for a combined $143 million. Centene did not immediately reply to a request for a comment on the Illinois settlement.
As a PBM for Illinois’ Medicaid program, Envolve and other Centene subsidiaries, provided pharmacy benefits to the Illinois Department of Healthcare & Family Services and other agencies, a statement from Illinois Attorney General Kwame Raoul said.
The investigation determined the PBM submitted inaccurate pharmaceutical reimbursement requests that failed to accurately disclose the cost of pharmacy services, the statement said, and the requests failed to disclose available pharmaceutical discounts and improperly inflated dispensing fees, the statement said.
PBMs, which have been accused of driving up health care costs, negotiate with drugmakers and pharmacies for lower drug prices behalf of health insurers and other payers.
The Illinois settlement calls for two installments from Centene,12 months apart, for a total of $56,717,652.
The Illinois Department of Healthcare & Family Services, which oversees Medicaid in the state, didn’t immediately respond to a request for comment.
In June, Centene agreed to pay $88 million to Ohio and $55 million to Mississippi, while denying any liability for the practices leading to the settlement, the company said in a statement at the time.
Ohio’s attorney general sued Centene in March, alleging the company used a web of affiliated contractors to overcharge the state for drugs provided to beneficiaries of Medicaid.
The company said in the June statement that it restructured its pharmacy benefits management operations in 2019 “to create a more transparent relationship” between its health plans and PBM and that Envolve would no longer operate as a PBM but rather as an “administrative service provider” on behalf of its local health plans.
Bloomberg contributed to this story.