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Health insurer Centene pays $143 million to settle PBM disputes

Consumers are going to hear the word ‘transparency’ more and more when it comes to health care issues

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Photo (c) CatLane - Getty Images
Centene Corporation has reached no-fault agreements with the attorneys general of Mississippi and Ohio over claims of improper practices by its pharmacy benefits manager (PBM) subsidiary, Envolve Pharmacy Solutions, Inc. (Envolve). “No-fault” doesn’t mean no penalty, though. Centene is forking over $143 million to settle the claims.

Under the terms of the deal, Centene will write an $88 million check to Ohio and another for $55 million to Mississippi. The allegations focused on how Envolve was structured and how its processes connected to the provision of pharmacy services in the company’s safety-net insurance program.

But the story probably won’t end there for Centene. Authorities in Kansas, Arkansas, Georgia, Oklahoma, and New Mexico are also reportedly considering litigation against the company.

Transparency is the keyword

Consumers will be hearing about transparency as it relates to PBMs a lot going forward.

Since it was first hit with the lawsuit, Centene says it has aligned all Medicaid, Medicare, and health insurance marketplace products on transparent pharmacy networks to eliminate spread pricing. Going forward, Envolve said it will operate as an administrative service provider, not a PBM, on behalf of Centene's local health plans to further simplify the company’s pharmacy operations.

"We respect the deep and critically important relationships we have with our state partners," Brent Layton, Centene's health plan president, said in a statement. "These agreements reflect the significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent."

Regulators and legislators alike are amping up their focus on PBMs. While the companies claim that they get consumers a better deal by negotiating discounts with drug suppliers, some of the nation's largest pharmacy benefit managers have been charged with hiding behind clouded and convoluted contracts with government agencies and health plans to jack up drug prices and drive out competition. 

Whether the other shoe will fall for the Big Three PBMs -- Express Scripts, CVS Caremark, and OptumRx -- is anyone’s guess. However, in publications found by ConsumerAffairs, those three companies all said they were aware that there is a lack of relevant, consumer-facing transparency and that they are working to remove those barriers. 

“Patients want to know if their drug is covered, how much it will cost, and what their final out-of-pocket costs will be,” OptumRx wrote. “As drug costs rise and more people are enrolled in high-deductible health plans, the need for this information is even greater.”

“What patients have told our pharmacists is that they feel like they no longer have a say in the matter of their prescriptions,” Monique M. Whitney, Executive Director of Pharmacists United for Truth and Transparency, told ConsumerAffairs.

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