Mississippi has reached a $55.5 million settlement agreement with Centene, the 24th largest corporation in the United States, amid an investigation into whether the state’s largest Medicaid contractor was overcharging for pharmacy benefits.
Centene also has reached a separate $88.3 million settlement with the state of Ohio. The company has not admitted fault in either settlement. The company will set aside $1.1 billion for settlements with other states investigating the company.
Attorney General Lynn Fitch and State Auditor Shad White released a joint statement, celebrating the development as a major win for Mississippi taxpayers.
“I do not care how large or powerful the company is, Mississippi taxpayers deserve to get what they paid for when the state spends money on prescription drugs, and we will stand up for the taxpayers if they do not get a square deal,” White said in the statement.
Centene’s subsidiary and contractors in Mississippi control health insurance benefits for about 480,000 Medicaid patients in the state.
The investigation was centered on pharmacy benefit managers, subcontractors who act as middlemen between insurance companies, pharmaceutical companies and pharmacies. The lawsuit alleged three areas of wrongdoing by PBMs: trying to double dip on reimbursements already paid by the state, artificially inflating drug dispensing fees and failing to disclose the true cost of pharmacy services.
Centene’s Mississippi subsidiary, Magnolia Health, paid its PBMs more than $1.1 billion from 2016 to 2020, according to the Division of Medicaid.
The Mississippi investigation into Centene has been going on for over two years after White hired the law firm Liston & Deas to look into potential wrongdoing in the corporation’s pharmacy benefit system under the state’s Division of Medicaid. Fitch’s office later began probing the company over the same billing issue.
Based on a contract with outside counsel posted on the Attorney General’s web page, the Ridgeland-based law firm of Liston & Deas will receive about $2.8 million of the $55.5 million settlement with Centene. The law firm entered into a contract with the Attorney General’s office to pursue the case against Centene.
Colby Jordan, a spokesperson for Fitch, confirmed the firm’s participation in the case. The contract with Liston & Deas is posted on the attorney general’s website, as mandated by state law. Based on that contract, the law firm would receive 5% of any settlement exceeding $25 million. Jordan confirmed that was the amount of the settlement the law firm received.
In a statement, Brent Layton, Centene President of Health Plans, Markets and Products said: “Putting these issues behind us allows us to continue our relentless focus on delivering high-quality outcomes to our members.”