Centene to pay $19M for overcharging health care costs in Washington state

Health care giant Centene will pay $19 million to Washington state to resolve a longstanding allegation that the company overcharged the state’s Medicaid program for its pharmacy benefit services.

The resolution is the second-largest Medicaid fraud recovery for the state, Attorney General Bob Ferguson and the Washington State Health Care Authority said in a statement Wednesday.

As part of the resolution, Washington will recover a total of $18,999,999.80, and the funds will go back to the state through the state Medicaid Fraud Penalty Account.

“We commend the AG for their continued partnership in stewarding state resources,” said HCA Director Sue Birch. “Controlling health care expenditures, especially prescription drug costs, remains a top priority for HCA.”

The AG’s Office and HCA’s Program Integrity Team began investigating pharmacy benefit managers in 2019 after a whistleblower provided information that they were failing to disclose true pharmacy benefits and services costs, according to the statement.

Centene allegedly failed to pass on discounts it received to the state Medicaid program and inflated dispensing fees. The whistleblower later filed a separate claim against Centene.

The managed health care company has resolved cases with 10 other states over the same conduct, according to the AG’s office.

The resolution was the result of a joint investigation conducted by the Washington Attorney General’s Office’s Medicaid Fraud Control Division and the Health Care Authority.

As part of the resolution, an additional $13 million from Centene will be paid to the federal government for administration of Medicaid in Washington state. Ferguson’s resolution with Wyeth, a pharmaceutical company owned by Pfizer Inc., in 2016 is the only Medicaid fraud recovery larger than Centene, the office said.

The HCA contracts with managed care organizations like Coordinated Care of Washington, a Centene subsidiary, to manage its Medicaid program.

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

Related: Office of Inspector General warns against telemedicine fraud

To report suspected Medicaid fraud in Washington, contact 360-586-8888 or MFCUreferrals@atg.wa.gov.

Senior counsel, Carrie Bashaw, Angela Coats-McCarthy, and Bill Stephens; principal forensic analyst, David McDonald; and legal assistant, Kim Sobol, handled this case for the Attorney General’s Office.

Attorney Andrea Kerstein, of Locke Lord in Chicago, represented Centene. Kerstein did not return a request for comment.