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Iowa Medicaid insurer agrees to $44M settlement in fraud case

cigaretteman

HR King
May 29, 2001
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The nation’s largest Medicaid insurer will pay $44.4 million as part of a settlement to resolve claims the company fraudulently overbilled Iowa’s privatized Medicaid program for pharmacy benefits and services.
Iowa Attorney General Tom Miller announced the settlement Thursday with St. Louis-based Centene Corp., one of three for-profit companies that help manage the joint federal and state program that finances roughly $7 billion in health care coverage annually for roughly 805,000 low-income and disabled Iowans.
“We are pleased to come to a resolution with Centene in this matter,” Miller said in a statement. “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.”

Centene, which operates as Iowa Total Care in the state, administers benefits to more than 350,000 Iowans through IA Health Link, Iowa’s Medicaid managed care program, and Iowa’s Children’s Health Insurance Program.




Miller’s office reviewed Centene’s operations in Iowa after a string of investigations and settlements that uncovered similar issues in other states. At least 13 states have reached settlements after pursuing legal action against Centene’s pharmacy benefits manager for overcharging its Medicaid programs.
Officials in Miller’s office found irregularities in the insurer’s reporting of costs of pharmacy benefits in the Medicaid program, including the pricing of prescription drugs.


Iowa Total Care administered its pharmacy benefits through Envolve, a pharmacy benefits manager that is owned by Centene.
According to the Iowa Attorney General’s Office, 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.”

Miller’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.


Centene did not admit any wrongdoing under the settlement, which covers the period of Jan. 1, 2016, to the present. Moving forward, however, the company must be fully transparent in its payments of all pharmacy benefit claims, which includes disclosing the exact amount paid to the pharmacy for each claim.

“We respect the deep and critically important relationships we have with our state partners,” Centene said in a statement. “This no-fault agreement reflects the significance we place on addressing their concerns and our ongoing commitment to making the delivery of health care local, simple and transparent. Importantly, this allows us to continue our relentless focus on delivering high-quality outcomes to our members.”

Settlement proceeds will be split between the state of Iowa and the federal Medicaid program pursuant to federal Medicaid requirements. Details of the fund allocations are still being determined, according to an Iowa Attorney General’s Office spokesperson.
Iowa state Sen. Pam Jochum, D-Dubuque, while applauding Miller’s diligence in recovering $44.4 million in taxpayer dollars, called the settlement “a stark reminder of the ongoing risks and costs of putting for-profit, out-of-state companies in charge of critical health care.”


“Medicaid privatization is not working for Iowa,” Jochum said in a statement. “It costs our state more, and provides far less service.”
Jochum has been a vocal critic and often talked of her frustrations accessing Medicaid services for her late adult daughter, who had a severe intellectual disability.

“At the very least, Iowa should exempt the disabilities community from Governor Reynold’s broken privatized system so that our most vulnerable aren’t caught up in such blatant fraud and mismanagement,” Jochum said.
Iowa Total Care’s contract with the state is set to expire in 2025.
A Centene spokesperson did not respond to emailed questions as to whether the settlement may impact its plans going forward as a managed care insurer under the Iowa Medicaid program.

In Ohio, Centene was awarded a managed care contract this summer to continue administering benefits in its Medicaid program after agreeing last year to pay that state $88 million to resolve allegations related to the provision of pharmacy services in the safety-net insurance program.

A spokesperson for the Iowa Department of Health and Human Services, which oversees Iowa’s Medicaid program, did not immediately respond to messages Thursday seeking comment about the settlement and Centene’s future as an Iowa Medicaid managed care insurer.

 
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