Centene Corporation is paying out $1bn to settle its Medicaid and Medicare rip offs. Why should we care?

Centene Corporation – the USA’s biggest Medicaid managed care organisation which has been scooping up a range of NHS contracts and UK private health care providers since 2016 – has had to set aside $1bn in 2021 to settle charges of defrauding publicly-funded Medicaid and Medicare Departments in 22 states.

The $1.1bn settlement for Pharmacy Benefits Management fraud is just the latest in a string of Centene’s offences and violations dating back decades – a matter of concern in the UK as the US corporation’s presence in the NHS grows.

Medicaid and Medicare Departments are publicly-funded health insurers for the elderly, poor and disabled in the USA. They contract with managed or accountable care organisations, such as Centene, that provide the health care. It is a system that is rife with fraud as the health care corporations rip off the taxpayer.

Centene Corporation has been caught out running a scam that has defrauded Medicaid and Medicare Departments by $ hundreds of millions. In Ohio, Centene has been caught charging twice for pharmacy benefit manager services, that operate as a middleman in the drug supply chain between drug-makers and health insurers such as Medicaid.

Centene’s scam to defraud the Medicaid and Medicare Departments consisted of spending millions in taxpayer money to hire a Pharmacy Benefits Manager to provide services for Medicaid recipients that essentially already were being handled by another Pharmacy Benefits Manager paid by the state.

In March 2021, the Ohio Attorney General brought a lawsuit against Centene’s local managed care company, Buckeye Community Health Plan. As a managed-care contractor with the Ohio Department of Medicaid, it signs up patients, creates networks of providers such as doctors, and it reconciles claims so providers are paid.

A USA Today investigation of the operation of Pharmacy Benefit Managers in Ohio and elsewhere found that they were ripping off Ohio’s Medicaid program by charging 3-6 times the normal rate for prescription drugs. CVS Caremark and OptumRx — the Pharmacy Benefits Managers serving all five of Ohio’s managed-care providers — had marked up prescription drugs by $224 million in a single year.

On top of that, Centene’s subsidiary Buckeye Community Health Plan was not only paying CVS Caremark these inflated prices, it also paid the Centene-owned PBM Envolve Health $20 million to provide the same pharmacy benefits services and charged the Medicaid Department for this.

After Ohio sued the company, Kansas Mississippi, Illinois and Arkansas announced settlements with Centene over Pharmacy Benefit Manager fraud totalling $154 million.

Centene also said it was setting aside $1.1 billion to settle such claims with 22 state Medicaid programmes. A US business and finance website reports that after making this announcement, CEO Michael Neidorff stressed to investors that the company hadn’t admitted wrongdoing and that his No.1 and No. 2 goals were making more profit in the future.

At the end of October this year, Centene decided to get out of the Pharmacy Benefits Manager business and issued a $30bn invitation to outside contractors to run it.

According to Michigan Pharmacy Association News , Pharmacy Benefit Managers negotiate discounts from manufacturers in exchange for giving their products preferred treatment, create networks of pharmacies and determine how much to pay pharmacies for the drugs they dispense.

They sound similar to the Medicines Optimisation Programme introduced into the NHS in England in 2014 with the Medicines Optimisation Dashboard.

US companies such as Optum (a subsidiary of the- then NHS England Chief Exec’s former employer United Health) quickly set up their medicines optimisation stall for NHS commissioners and providers.

In 2019 Optum, along with others, faced a Senate investigation into how medicines management operates in the US, where it is apparently inexorably tied into soaring big pharma prices.

Centene’s UK subsidiary Operose Health Ltd also provides Medicines Optimisation Services to the NHS, as an approved supplier on NHS England’s Health Systems Support Framework. (6 out of the 10 approved suppliers are global American companies.)

Centene’s UK subsidiary Operose Health Ltd is now the biggest provider of NHS GP practices.

Centene Corporation also owns Circle Health Group and BMI Healthcare. Between them they have more than 50 hospitals, clinics and specialist centres across England, Scotland and Wales, as well as “integrated” MSK and dermatology services

Centene also has a share in the UK’s healthcare app market through its 2019 US$50m investment in Babylon. Babylon holds NHS contracts to provide digital versions of GP and helpline (111) services to millions of Londoners, despite repeated concerns about its products safety and impact on traditional NHS GP funding. In June 2021, Babylon entered a £2.9bn merger with special purpose acquisition company Alkuri Global. US big data company Palantir has also taken a strategic stake in Babylon.

2 comments

  1. *Centene is the largest MEDICAID managed care organization (MCO) in the US *with tentacles in California, Florida, New York, and Texas, four of the largest Medicaid states. Centene currently has 26 million people in it’s clutches, *with 25 million Medicaid recipients.* (Centene has only 1.1 million Medicare recipients in their Medicare (dis) Advantage programs ).

    Medicaid was created in1965 as a public health program for the poor and disabled.

    Medicaid is predominantly funded by the federal government but is totally administered by individual state governments.

    At the outset, Medicaid was a Fee For Service program where an individual could choose their doctor or hospital as long as the doctor or hospital accepted Medicaid as a payer and it would pay for the service/care. Most large hospitals were mandated to accept it.

    Medicaid is now 70-85% MCO’s where the recipient/patient is forced into a corporate run hell that receives capitation payments (monthly premiums upfront) from the “public” Medicaid program whether they provide care or not. Of course, denial of care is constant, especially for the most needy, chronically ill disabled.

    Thanks for all your hard work for trying to keep the monsters out of the NHS.

    We poor, disabled and elderly in the US are already in hell.

    Sumitra

    On Sat, Dec 11, 2021 at 4:57 PM Calderdale and Kirklees 999 Call for the NHS wrote:

    > Green__Jenny posted: ” Centene Corporation – the USA’s biggest Medicaid > managed care organisation which has been scooping up a range of NHS > contracts and UK private health care providers since 2016 – has had to set > aside $1bn in 2021 to settle charges of defrauding publicly-fu” >

    Liked by 1 person

  2. Correction to the above comment: In1965 Medicaid began as a program for poor women and their children on welfare. In the 1970’s it expanded to include the very poor disabled living at the US federal poverty level. Since 2010 and the enactment of the ACA (Obamacare), Medicaid has now been expanded to include many more people of all ages (depending what US State you live in) and up to 138% of the Federal Poverty Line. Because Medicaid is now almost completely privatized—this is allows millions/billions of the public Medicaid money to flow to Medicaid Managed Care Organizations (MCO’s).

    Like

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