Centene Pays South Carolina $25M to Settle Overcharging Allegations

Centene Corporation has reached a $25.89 million settlement after allegedly overcharging South Carolina’s Medicaid program for pharmacy services.

Per the settlement, Centene must pay South Carolina a total of $25,898,070.69 in two installments. The payer must provide the first installment within 45 days of the date the settlement was executed and the second installment no later than one year after the first installment.

The settlement also required Centene to acknowledge an obligation to comply with South Carolina laws when delivering or receiving payment for any managed care pharmacy benefit or service in the state. The payer agreed to use business practices that provide complete transparency related to the adjudication and payment of pharmacy benefit claims.

Centene will continue providing pharmacy benefits and services according to existing contracts with South Carolina, including the South Carolina Department of Health and Human Services (SCDHHS), which administers the Healthy Connections Medicaid program.

According to South Carolina Attorney General Alan Wilson, in addition to overbilling for pharmacy services, Centene and its subsidiaries misrepresented the cost of pharmacy services, failed to disclose discounts to the state, and filed improper reporting to the state about its pharmacy benefit services. The settlement has resolved these allegations.

Centene agreed to the terms in the settlement but denied any wrongdoing and maintained they operated in South Carolina in compliance with all applicable laws and regulations.

This is not the first time Centene has been involved in alleged instances of overcharging. The payer has reached settlements with at least 15 states.

In February 2023, the payer’s managed care plans agreed to pay California $215 million after two plans allegedly overcharged Medi-Cal—the state’s Medicaid program—by reporting inaccurate prescription drug costs.

According to the settlement, Centene used advantages in its pharmacy benefit manager (PBM) contracts to save its plans $2.70 per prescription drug claim for two years. The Department of Justice (DOJ) alleged that Centene and the PBM did not disclose or pass on the discounts to Medi-Cal, resulting in higher fees and drug costs reported to the state.

In September 2022, the payer reached a $165.6 million settlement with the Texas Medicaid program to resolve claims that Centene’s business practices violated the Texas Medicaid Fraud Prevention Act. Centene also paid $88.3 million to Ohio in 2021 to settle overbilling allegations.