Centene (CNC) Reaches No-Fault Agreements with Attorneys General of Ohio and Mississippi to Resolve Claims
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Centene Corporation (NYSE: CNC) today announced that it has reached no-fault agreements with the Attorneys General of Ohio and Mississippi to resolve claims made by the states related to services provided by Envolve Pharmacy Solutions, Inc. (Envolve), its pharmacy benefits manager subsidiary.
Under the terms of these agreements, Centene will pay $88 million to Ohio and $55 million to Mississippi. The practices described in the settlement focus on the structure and processes of Envolve, primarily during 2017 and 2018. In the settlements, the Company denies any liability for these practices. As a result of the settlement, the Ohio Attorney General's litigation against the Company will be dismissed.
In early 2019, Centene proactively restructured its pharmacy benefits operations to create a more transparent relationship between its health plans and its pharmacy benefits manager. Since that time, Centene has also aligned all Medicaid, Medicare and health insurance marketplace products on transparent pharmacy networks to eliminate spread pricing. Going forward, Envolve will operate as an administrative service provider, not a PBM, on behalf of Centene's local health plans to further simplify our pharmacy operations.
"We respect the deep and critically important relationships we have with our state partners," said Brent Layton, Centene's President of Health Plans, Markets and Products. "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. Importantly, putting these issues behind us allows us to continue our relentless focus on delivering high-quality outcomes to our members."
Additionally, the Company is in discussions with a plaintiff's group led by the law firms of Liston & Deas and Cohen & Milstein in an effort to bring final resolution to these concerns in other affected states. Consistent with those discussions, Centene has recorded a reserve estimate of $1.1 billion related to this issue, exclusive of the above settlements.
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