Ohio Capital Journal
Federal officials are probing actions taken in Ohio in 2017 by the largest Medicaid managed care provider in the United States, a source familiar with the investigation has told Ohio Capital Journal.
The U.S. Centers for Medicaid and Medicare Services declined to confirm or deny the existence of an investigation. But the source said the agency is looking into a finding by a consultant hired by the state to analyze billions of dollars in drug transactions in the state’s Medicaid managed-care program during 2017 and 2018.
The finding raised questions about whether Centene — a company which is not well known but is a huge player in state Medicaid programs — effectively billed the state for duplicate services while working with another of the nation’s largest corporations, CVS Health.
The potential problems found in Ohio would not be the first for Centene, The company already has faced more than $23 million in fines and lost incentives over separate issues with its performance in more than a dozen state Medicaid programs, the Des Moines Register reported in 2018.
Loads of hidden money
As with most other states, Ohio’s $26 billion Medicaid program is mostly privatized. And some of the corporations that contract with the agency have long been accused of using their size and a lack of transparency to take outsized profits from a Medicaid system that is known for underpaying providers such as doctors, hospitals, dentists and pharmacists.
Experts say it’s especially critical now to make sure corporations aren’t extracting excessive profits from Medicaid, something they’ve been increasingly accused of in a rapidly consolidating marketplace. That’s because the global coronavirus pandemic is driving large numbers of new patients onto the Medicaid rolls even as the disease is squeezing the economy and sapping tax revenue to pay for the program.
The state’s Medicaid caseloads had dropped in all but two of the 18-months leading into 2020, but then they expanded rapidly when the new coronavirus hit. After increases of fewer than 10,000 in January and February, they leapt by 25,000 in March and 94,000 in April, the latest month for which data are available.
The Ohio Department of Medicaid contracts with managed-care companies to coordinate health care for almost 90% of the roughly 3 million patients in the program.
The companies, in turn, contract with doctors, hospitals and other providers. They also contract with pharmacy benefit managers, which decide what drugs get covered and how, determine pharmacy reimbursements, leverage manufacturer rebates, reconcile pharmacy claims and provide other services.
Pharmacy benefit managers, or PBMs, fight hard to keep information about how they determine drug reimbursements secret. But in the summer of 2018, The Columbus Dispatch obtained confidential reimbursement information from 40 pharmacies. It showed that the two PBMs — CVS Caremark and OptumRx — serving Ohio Medicaid’s five managed-care organizations were charging the taxpayer-funded managed-care companies a lot more for drugs than they were paying the pharmacies that had bought them and dispensed them to patients.
Then, under political pressure, the Medicaid department got the PBMs to cough up all of their reimbursement data between April 1, 2017 and March 31, 2018, and hired the consulting firm HealthPlan Data Solutions to analyze it.
Perhaps the biggest finding was that the pharmacy-benefit managers serving Ohio Medicaid charged managed-care companies such as Buckeye almost a quarter-billion dollars more for drugs than they paid the pharmacies that had dispensed them.
But in addition to that eye-popping number, the analysis also found that one of the state’s five managed-care plans, Buckeye Health, paid its PBM, CVS Caremark, through Envolve, a “pharmacy benefit administrator.”
There is a close relationship between Buckeye and Envolve. Both are owned by St. Louis-based Centene, which represents 13% of Americans enrolled in Medicaid managed-care plans. That makes Centene, No. 42 on Forbes’ Fortune 500, the largest Medicaid managed-care company in the United States. Continue Reading..