DES MOINES, IOWA (December 15, 2022) — Iowa Attorney General Tom Miller announced a $44.4 million settlement with Centene Corp. over allegations the managed-care company overbilled the state’s Medicaid program for pharmacy benefits and services.
Centene, the largest Medicaid managed-care insurer in the nation, operates as Iowa Total Care in the state. It is one of three managed-care organizations under the state’s Medicaid program.
“We are pleased to come to a resolution with Centene in this matter,” AG Miller said. “Medicaid funds are a vital resource for so many Iowans. Ensuring these dollars are used as intended means that our health-care system is in a better spot to help our residents.”
The settlement proceeds will be split between the State of Iowa and the Federal Medicaid program pursuant to federal Medicaid requirements.
AG Miller’s office reviewed Centene's operations in Iowa after a string of investigations and settlements between the company and other states. The review found irregularities in Centene’s practices related to the reporting of pharmacy-benefit services costs in the Medicaid program, including the pricing of prescription drugs.
The state of Iowa's Medicaid program provides coverage to about 805,000 Iowans, and it does so through the use of managed-care organizations (MCOs). Centene’s Iowa Total Care administered its pharmacy benefits through Envolve, a Centene-owned pharmacy-benefits manager.
Centene allegedly used Envolve to deceptively receive payments that it was not entitled to; falsified reports related to the work under its provider agreement with the state; and misrepresented the cost of pharmacy services.
The AG’s office also alleges that Envolve and Centene failed to disclose or pass on some retail discounts to the state, inflating fees and costs for Iowans.
Under the settlement, Centene, which does not admit wrongdoing, must provide full transparency related to the payment of all pharmacy-benefit claims, including the exact amount paid to the pharmacy for each pharmaceutical claim.
