With the strengthening of PBM regulation, Centene handed over millions of dollars to another state

With the strengthening of PBM regulation, Centene handed over millions of dollars to another state



Centene will pay Kansas $32.4 million to resolve the fifth (but not the last) allegation that the St. Louis-based insurance company charges excessive drug costs to the state’s Medicaid program.

The company has set aside $1.25 billion for future settlements related to its Envolve Pharmacy Benefit Manager, and has since reorganized it as a third-party administrator for processing claims.To date, the largest Medicaid carrier in the United States has paid a total of US$214 million in settlement payments Arkansas, Illinois, Mississippi and Ohio on its now-defunct PBM.Kansas, along with more than a dozen other states, hired the law firm Liston & Deas to investigate PBM’s Medicaid bills and Rebate practice, The states said they avoided the ban on price differentials.

Centene has signed Medicaid contracts in 30 states, covering 14 million registrants.

This for-profit company is now Looking for a new PBM Manage its annual drug expenditure of 30 billion U.S. dollars, and plan to evaluate the proposal next year, and then let a new contractor take over operations by 2024. At the same time, Centene is uninstalling its drug management platform. In the third quarter, the insurance company paid $229 million to transition from using RxAdvance, a company that provides automated drug pricing tools.

Kansas Attorney General Derek Schmidt (R) did not respond to an interview request for the settlement agreement, which does not mean that the insurance company has admitted guilt.

Schmidt said at the press conference: “We take the role of protecting Kansas taxpayers seriously and detecting and preventing fraud and overpayments in the state’s Medicaid program.” “Today’s settlement involving PBM practices is the first in Kansas. In case of such a settlement, other investigations are still continuing.”

Centene will continue to participate in Kansas’ Medicaid program (known as KanCare) with CVS Health’s Aetna and UnitedHealth Group’s OptumRx. These three companies control 75% of prescription drug claims in the United States. Consolidation within the PBM industry makes it difficult for regional health plans to find PBMs that are not owned by their competitors.Many startups that promise to operate independently are just White gloves these PBM services Provided through group buying agencies. According to a report, PBM’s gross profit increased by 12% in three years, reaching 28 billion U.S. dollars in 2019. Report on PBM Accountability Project Released last week.

CVS Health, UnitedHealth Group, and Centene also dealt with prescription drugs for Ohio’s Medicaid program, when the state’s auditors concluded in 2018 that the state’s intermediaries charge 2.25 higher drug charges than they pay for the pharmacy. One hundred million U.S. dollars.Next year, Ohio plans to operate its own PBM, and the state is expected to save 240 million US dollars per year.

Once the current contract expires in 2023, Centene must re-bid to retain its contract with KanCare. Under the settlement agreement, the company now allows Kansas to access all its pharmaceutical transaction data from the point of sale to reimbursement.

A Centene spokesperson wrote in an email: “We respect the deep and vital relationship we have established with our state partners.” “This no-fault agreement reflects our importance to addressing their concerns. , And our continued commitment to provide local, simple and transparent healthcare services.”

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According to Antonio Ciaccia, president of 3 Axis Advisors and CEO of 46brooklyn Research, the drug pricing regulator, states are strengthening their supervision of PBM practices in Medicaid and other areas.

“In the past four years, we have seen a lot of accountability and review, which is largely due to the liberation of drug pricing data,” Ciaccia said. “No matter how you divide it, evaluate the products we buy and our ability to buy at what price, not only let PBM be responsible, but also the entire drug supply chain, because everyone can profit from this system is too complicated.”


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