Centene settles Medicaid fraud allegations in New Mexico

Centene Corp. will pay $13.7 million to New Mexico to settle allegations that its former pharmacy benefit manager overcharged the state’s Medicaid department for drugs, the state attorney general said Monday.

New Mexico is the sixth state to settle with Centene. The nation’s largest Medicaid insurer is exiting the PBM space after reserving $1.25 billion to settle allegations from at least nine states that its pharmacy benefits arm, Envolve, inflated charges.

The company has paid out $260.1 million to New Mexico, Illinois, Arkansas, Mississippi, Ohio and Kansas. California regulators said in April that they are investigating Centene over alleged Medicaid fraud. Georgia, South Carolina and Indiana are also reportedly investigating the insurer.

New Mexico’s deal does not represent an admission of guilt by Centene, a spokesperson said.

State Attorney General Hector Balderas did not immediately respond to interview requests.

New Mexico’s Medicaid program provides coverage to nearly 1 million lower-income adults and children.

The state’s managed-care program is privately run by Centene subsidiary Western Sky Community Care, not-for-profit integrated system Presbyterian Health Plan and Blue Cross Blue Shield New Mexico, an affiliate of Health Care Service Corp. These insurers contract with PBMs to manage prescription services for Medicaid enrollees.

State officials will investigate other PBMs that have contracts with New Mexico public health programs, the news release said.

Centene’s settlement agreement with New Mexico comes a week after the Federal Trade Commission announced it was investigating the operations of the six largest PBMs.