Ohio Department of Medicaid et al. v. Centene Corporation et al.

Overview

On June 14, 2021, Ohio Attorney General David Yost announced a $88.3 million settlement with Centene Corporation and its wholly owned subsidiaries, for their alleged role in not only breaching contractual and fiduciary obligations to the Ohio Department of Medicaid (ODM), but defrauding ODM out of millions of dollars through an elaborate scheme with pharmacy benefit subcontractors to maximize company profits at the expense of the ODM and millions of Ohioans who rely on Medicaid.

The settlement will be one of the largest in Ohio history, sending a message to all pharmacy benefit managers and healthcare companies that they cannot take advantage of patients and taxpayers.

Cohen Milstein serves as Special Counsel to the Ohio Attorney General.

Case Background

On March 11, 2021 Cohen Milstein, serving as Special Counsel to the Ohio Attorney General David Yost, filed a breach of contract and unfair business practices lawsuit on behalf of the Ohio Department of Medicaid (ODM) against Centene Corporation, a managed care organization, in the Franklin County Court of Common Pleas.

The lawsuit alleges that Centene subsidiary Buckeye Health Plan utilized and conspired with a web of subcontractors for the provision of pharmacy benefits in order to misrepresent pharmacy costs, resulting in millions of dollars of overpayments by ODM.

The Ohio Department of Medicaid administers a medical assistance plan that provides coverage to about 2.9 million Ohioans, and it does so through the use of Managed Care Organizations (MCOs). One such MCO, Centene’s Buckeye Health Plan, administered its pharmacy benefit via sister companies Envolve Health Solutions and Health Net Pharmacy Solutions. The practice of subcontracting to more than one Pharmacy Benefit Manager (PBM) raised questions about Buckeye Health Plan’s business practices and, ultimately, Centene’s.

The Office of the Attorney General, through Cohen Milstein and its co-counsel, conducted an investigation of these practices, finding significant breaches of contract. Notably, these include:

• Filing reimbursement requests for amounts already paid by third parties.
• Failing to accurately disclose to ODM the true cost of pharmacy services, including the disclosure of discounts received.
• Artificially inflating dispensing fees.

Centene removed the case to federal court, ODM filed a remand motion which Centene originally opposed but, in light of the settlement, the parties agree to remand.

Federal court case name: Ohio Department of Medicaid et al. v. Centene Corporation et al., Case No. 2:21-cv-01502-MHW-CMV (S.D. Ohio)

Originally filed under seal on March 11, 2021 in the Court of Common Pleas, Franklin County, Ohio. Unsealed: April 5, 2021