Mississippi investigating its largest Medicaid provider over pharmacy benefits

A member of the Senate Medicaid Committee reviews a Mississippi Division of Medicaid handout that reviews the managed care rule in this 2018 file photo.Rogelio V. Solis | AP file photo

Mississippi officials are investigating whether Fortune 500 company Centene and possibly other firms may have significantly overcharged taxpayers as they managed billions of dollars worth of state Medicaid health insurance benefits.

The Mississippi Division of Medicaid confirmed the probe to the Daily Journal on Monday. Medicaid officials said the attorney general’s office hired outside attorneys to “investigate and potentially pursue claims” that include Centene’s management of pharmacy benefits.

The investigation is in the early stages but is similar to a recently-announced Ohio lawsuit against Centene, said Colby Jordan, a spokeswoman for Attorney General Lynn Fitch. In that case, authorities allege Centene overcharged Ohio taxpayers by millions of dollars.

In Mississippi’s Medicaid managed care system, Centene subsidiary Magnolia Health and two other contractors oversee health insurance benefits for about 480,000 poor adults and children, disabled people, pregnant women, and others. The Division of Medicaid pays the companies a set rate per patient.

Mississippi investigation similar to Ohio lawsuit against Centene

In September, Fitch’s office retained Ridgeland-based law firm Liston & Deas to investigate possible Medicaid financial losses due to unnamed managed care firms, according to a contract. The document mentions possible “fraud, waste, incorrect payment, or overpayment.”

Liston & Deas is the same firm working with the Ohio attorney general’s office in its lawsuit against Centene. That lawsuit is sealed. But a March 11 news release from Ohio Attorney General Dave Yost claims Centene — through its Ohio subsidiary Buckeye Health Plan — used a network of pharmacy benefit subcontractors to inflate costs.

“Corporate greed has led Centene and its wholly owned subsidiaries to fleece taxpayers out of millions,” Yost said in the release.

The Ohio suit, according to Yost, alleges three areas of wrongdoing. They include requesting reimbursements for amounts already paid by the state, failing to disclose the true cost of pharmacy services, and artificially inflating drug dispensing fees. Yost’s office suggested that Centene’s practice of subcontracting with more than one firm to provide pharmacy benefits had raised red flags.

In Mississippi, Magnolia Health uses at least two companies — Envolve Pharmacy Solutions and RxAdvance — to get drugs to Medicaid recipients, according to a 2019 Centene news release.

Centene has said the Ohio claims are unfounded, adding its pharmacy contracts were pre-approved by the state. The St. Louis-based company — the largest Medicaid provider in the country with revenues topping $111 billion last year — did not respond to the Daily Journal’s requests for comment for this story.

Lawmaker demands oversight of Mississippi Medicaid managed care

The Ohio lawsuit caught the eye of Rep. Becky Currie, R-Brookhaven, a nurse who serves on the House Medicaid Committee. In a recent Facebook post, she linked to Yost’s announcement and wrote of her concern that companies running Mississippi’s Medicaid program are “ripping us off.”

“This (is) maybe a bigger scandal than (Chris) Epps at the Department of Corrections and Department of Human Services combined,” Currie wrote, referencing two of the largest Mississippi scandals involving taxpayer money in recent years. “But we will never know until they are audited. If they have stolen millions from Mississippi I want to know and I want to know now.”

Currie wants legislation passed to require independent and in-depth audits of the state’s managed care companies. Beyond Centene’s Magnolia Health, the state’s managed care program — known as MississippiCAN — includes UnitedHealthcare and Molina Healthcare. MississippiCAN provides benefits to about 60% of all Medicaid recipients in the state, and runs state and federal taxpayers about $3 billion annually.

“When you look at Ohio, the same company (Centene) is doing the same business here,” Currie told the Daily Journal. “And chances are, they’re doing the exact same thing (with pharmacy benefits). The reason I asked for a full audit is if you’re cheating in one thing, chances are you’re cheating in others.”

Legislature considers audit requirements for Mississippi Medicaid providers

The chairmen of the House and Senate Medicaid committees, Rep. Joey Hood, R-Ackerman, and Sen. Kevin Blackwell, R-Southaven, said they know of the Ohio lawsuit. Blackwell added he is aware that the Division of Medicaid is specifically examining Centene’s practices in Mississippi.

The Legislature is considering a pair of bills in the final days of the session to reauthorize the state’s Medicaid program and make several tweaks to the agency. Both the House and Senate versions of the Medicaid legislation include provisions that would mandate independent audits or reviews of Mississippi’s managed care companies.

Division of Medicaid officials told the Daily Journal they already conduct various audits, reviews and monitoring of the state’s managed care contractors. The agency’s statement said it “takes seriously its duty to administer a high-quality program that utilizes tax dollars appropriately.”

But Hood said the legislation would allow outside auditors — such as State Auditor Shad White or Medicaid experts his office might hire — to take an in-depth look at certain unscrutinized portions of the state’s managed care program. Such outside audits would “make sure the managed care folks are providing the level of care that they’re supposed to be doing,” Blackwell said.

“I hope we find nothing’s going on,” Currie said of the state’s managed care companies. “I don’t want taxpayers to be the losers. But let’s look. All I’m saying is it’s time. Ten years is long enough with no oversight.”

Bidding process to begin for new managed care contracts

The AG’s investigation of Centene and possibly others comes as the state gets ready to bid out new five-year managed care contracts. Hood and Blackwell said they expected the bidding process for contracts worth billions of dollars in total will begin in the next month or two, even though the contracts for Centene, UnitedHealthcare and Molina won’t expire until next year.

Currie questions whether managed the care is the ideal way to run Medicaid. She pointed to a recent legislative hearing where many medical professionals complained about the current system. Multiple lawmakers including Currie also criticized the system four years ago, following a report sharply critical of the contractors’ performance.

“When you have hospitals and doctors and physical therapists and pharmacists — everybody in the medical community — saying (the managed care contractors) don’t pay us — then where is all of this money?” Currie asked. “Because the taxpayers of Mississippi are spending money. A truckload of money.”

Despite some criticism, the trio of companies maintains sway among many state leaders, in part thanks to their lobbying efforts.

Centene, for instance, hired two of the top lobbyists in the state last year, according to state records, for a combined fee of $385,000. It has paid lobbyists more than $2.5 million since winning its first Mississippi Medicaid contract in 2011.