COLUMBUS, Ohio — Ohio Attorney General Dave Yost announced on Monday that the state has reached a settlement with Centene, which will see the healthcare giant pay the state $88.3 million.
Ohio's settlement with Centene comes as the result of a lawsuit filed earlier this year that alleged that the pharmacy benefit manager (or PBM) was double-charging the Ohio Department of Medicaid. Centene admitted no fault as a result of the settlement, which Yost said is common in these situations.
"Centene used sophisticated moves to bill unearned dollars – moves known only at the top levels of health care companies,” Yost said. “It has taken a huge effort by my team to untangle this scheme--and now that we know how it works, the alarm bells should be ringing for anyone using similar tactics.”
PBMs are third-party entities that manage health care plans, in this case, Medicaid. They act as the middleman between you, the insured, and the insurer or the pharmaceutical company. Pharmacy benefit managers also play a huge part in dictating the cost of medications and coverage.
Ohio has a sordid history with PBMs. In 2018, the state canceled its current contracts with them. This forced PBMs to change the way they did business.
In 2018, an audit conducted by then-State Auditor Dave Yost showed consumers in Ohio were being overcharged for their medication. The audit found Ohio Medicaid was billed $223.7 million more for drugs than the PBMs reimbursed Pharmacies to fill those prescriptions. That report claims those savings were pocketed by the PBMs, something they deny. That practice is called "spread pricing," and it killed competition because it gave preferred treatment to pharmacies that the PBMs own.
According to Yost, the settlement also includes a most favored nation clause, in which Ohio's payment from Centene could increase based on any settlements the company makes with other states. In addition to Ohio, Centene announced a settlement with Mississippi on Monday.
The biggest PBM in Ohio is CVS Caremark. It runs four of the five Ohio Medicaid Managed Care Plans.
This is a developing story. Check back with wkyc.com for further updates.
EDITOR'S NOTE: The video in the player below is from a previous story.