Ohio AG files a lawsuit against Centene after review
Dave Yost is filing a lawsuit about Envolve subcontracting.
Ohio Attorney General Dave Yost has filed a lawsuit alleging that Centene (CNC), a health insurance company, “misrepresented the pharmacy costs that led the state’s Medicaid program to unnecessarily spend millions of dollars “. The lawsuit alleges that the Buckeye Health Plan managed care plan, owned by Centene, “was part of a network of subcontractors providing prescription drug benefits to the state Medicaid program. Buckeye raised $ 20 million in the process. “
The Buckeye Health Plan was a managed care plan commissioned by Ohio Medicaid to use prescription drugs. It was hired with two PBMs, CVS Caremark (CVS) and Optum Rx, to do the leg work. After an audit found that Buckeye was paying a much higher fee for pharmacy services than other plans, CVS and Optum Rx were asked to terminate their contracts. However, Buckeye had also hired Envolve, a pharmacy administrator, to provide similar services. Envolve is also owned by Centene.
Photo by Pierre Borthiry on Unsplash
“Buckeye was billed $ 321 million by CVS and Envolve after pharmacies were reimbursed $ 268 million for prescription drugs,” the exam reads. “The $ 53 million difference meant a higher cost per prescription than any other plan – 6.5% versus 8% to 9.4%.” Additionally, Envolve “raised $ 20 million of the $ 53 million”. Ohio state officials determined that Centene kept another of its companies, Health Net Pharmacy Solution.
Yost said at the time of filing, “Corporate greed has led Centene and its wholly-owned subsidiaries to get taxpayers out of the millions. This conspiracy to get Medicaid payments through misleading means is now ending. We are confident that Centene and its subsidiaries have materially violated their commitments to both the Department of Medicaid and the state of Ohio. “
A Centene spokesperson responded, “These claims are unfounded and Envolve will aggressively defend the integrity of the pharmacy services provided to the state of Ohio. Envolve’s pharmacy contracts with the state are reviewed and pre-approved by state agencies before they ever go into effect. Additionally, these services have saved Ohioans millions in taxpayer dollars through market-based drug pricing. “
In February 2021, the Lehigh County, Pennsylvania controller estimated that “the county could have saved $ 1.4 million in 2019 if local officials had been informed of the extent of the discounts offered by Highmark Blue Cross Blue Shield Express Scripts provided, pocketed benefits for the pharmacy and when comparative pricing was sought for 200 different prescription drugs. “And in December, a report found that pharmacy benefit managers” pocketed more than $ 89 million raised on behalf of the Florida Medicaid program. “
Now states are tightening their rule. “Dozens of states have proposed or passed 160 laws in the past few years to tighten supervision over PBMs,” said the National Academy of Public Health.
“There are numerous opportunities for overload and anti-competitive behavior because of the deliberate lack of clarity in drug pricing in the pharmacy benefit manager industry,” said Antonio Ciaccia, director of 46Brooklyn, a research firm and former lobbyist for the Ohio Pharmacists Association. “While Congress is turning its thumbs on long overdue reforms, states like Ohio and attorneys general like Dave Yost are campaigning to cleanse the system of its embedded dysfunction. Anyone who believes these results are outliers found only in Ohio, only Centene, or only Medicaid have news for you: it happens everywhere. “
Ohio AG’s Yost files lawsuit against Centene and launches the latest volley in its war against PBMs
Ohio attorney general is suing a health plan over its PBM contracts and Medicaid