Centene’s legal issues

In the past 10 months, Centene has settled with nine states accusing it and its pharmacy business, Envolve, of overcharging Medicaid for prescription drugs and services: it has agreed with Arkansas, Illinois, Kansas, Mississippi, New Hampshire The state and Ohio reached a settlement, according to a press release from those states’ attorneys general. The other three are yet to be identified by Centene or the states themselves.

According to it, the company has set aside $1.25 billion for these settlements and future lawsuits. Report to SEC in 2021.

Centene has deny wrongdoing In a public statement, KHN did not respond to multiple interview requests and did not respond to emailed questions. Magellan also did not respond to interview requests.

From the outset, other California health insurers opposed the state takeover of the Medi-Cal drug program, in part because it took away a business. They were even more angry when the state allowed one of their biggest rivals to seize power — especially given its legal entanglements.

The state Department of Health Care Services, which administers Medi-Cal, admitted to KHN in March that it was investigating the company, but declined to provide specifics. The state is investigating Centene’s role in providing pharmacy benefits before the state took over from managed care insurers.

“DHCS takes all allegations of fraud, waste and abuse seriously and investigates allegations where necessary,” department spokesman Anthony Cava said in a statement.

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When Medi-Cal Rx debuts Jan. 1, thousands of Californians can’t be added Critical—and sometimes life-saving—drugs for days or weeks. Doctors, pharmacists and patients seeking help were often put on hold for up to eight hours.

Magellan blamed staffing shortages during the COVID-19 omicron surge and lack of patient data in insurance plans for the problems.State health officials pull out all the stops Solve the problem And appeared before the Legislative Council to assure lawmakers that the contractor would not be paid in full.

But Medi-Cal patients still face uncertainty.

Reports surfaced shortly after Magellan took over California’s Medi-Cal drug program Love News and other publications Centene may sell Magellan’s pharmacy business.

Centene officials have not confirmed the sale. But it would be in line with the company’s recent moves to restructure its pharmacy business in the face of state investigation — such as seeking an outside company to start managing its drug spending.

“Once you tell PBMs they actually have to do well, there’s no more money. It’s time to go,” said Antonio Ciaccia, president of drug pricing regulator 3 Axis Advisors, referring to what has been called the Pharmacy Benefits Manager.

Another ownership change in California’s drug program could create more disruption for the state’s most vulnerable residents, some of whom still struggle to access medicines and specialty medical supplies after Magellan’s tough takeover.

“I don’t know what kind of instability is going on internally when there’s such a drastic change,” said Linnea Koopmans, chief executive of the California Local Health Plan, which represents the state’s public Medicaid insurer that competes with Centene. “It’s just an open question.”

Koopmans and other Centene critics acknowledge that California has long relied on private insurance plans to provide Medi-Cal enrollees with medical and prescription drug coverage, and the state shouldn’t be surprised by the change in ownership brought on by the consolidation of the health care industry. Centene, for example, has a history of taking over California contracts after acquisitions—it did so at the time of acquisition. buy health net 2016.

But consumer advocates say the Centene fiasco makes clear that if the state chooses to hand over responsibility for public programs, it must strengthen its oversight of corporate mergers.

“In an ideal world, it’s all behind-the-scenes conspiracy that people won’t notice — until they notice, until something goes wrong,” said Anthony Wright, executive director of consumer advocacy group Health Access California. “It just increases the need to make sure there is oversight and accountability.”

This story is made by KHNrelease California Healthlineeditorial independent service California Healthcare Foundation.

Kaiser Health News is a national health policy news service. It is an independent editorial project of the Henry J. Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.