Posted on

RX- Medicaid Drug Proposal Sets Up Likely Constitutional Challenge

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Pharma will argue that asking them to explain how the calculate their prices to CMS is stealing their private property under the 5th amendment.


Clipped from:

Provisions in a proposed HHS policy aimed at driving down drug costs to the Medicaid program overstep the agency’s authority and are likely to face a constitutional challenge, attorneys say.

The proposed rule (RIN: 0938-AU28), issued in May, aims to prevent the misclassification of drugs, particularly when brand-name drugs are inaccurately labeled as generic, which can result in lower rebate payments for states.

Lawyers representing drugmakers say the proposal would rewrite the rules of engagement for drug companies looking to do business with the Medicaid Drug Rebate Program, a partnership that allows drug makers access to the nation’s 94 million Medicaid and CHIP beneficiaries in exchange for offering Medicaid agencies the lowest possible price for prescription drugs.

They pointed to a move by the department’s Centers for Medicare & Medicaid Services to clarify ambiguous terminology that allowed drugmakers to avoid paying higher rebates to Medicaid. They also criticized a requirement that manufacturers of between three and 10 of the costliest drugs in the drug rebate program complete surveys detailing proprietary information such as production expenses, research costs, and international pricing.

The agency’s tightening grip on drug prices comes as costs associated with covering expensive specialty drugs like gene and cell therapies continue to spiral.

A report from the Magellan Rx Management, one of the nation’s largest Medicaid pharmacy benefit managers, found six drugs with an average cost per patient in 2021 of over $100,000. Two drugs, Novartis’ Zolgensma and Sarepta Therapeutics’ Exondys, used to treat muscular dystrophy, topped out at over $1 million per patient.

An earlier report by the Health and Human Services Office of Inspector General said that, without greater government oversight to control spending, the per-enrollee rates that state Medicaid agencies must pay to managed care organizations would continue to rise dramatically as more and more high-cost drugs enter the market.

The proposed rule’s reporting requirement would try to rectify this by requiring manufacturers to offer medicines priced within the top 5% to negotiate significant rebates either directly with CMS or with 50% of state Medicaid agencies.

Those that don’t would have to send CMS details of their proprietary pricing information. Manufacturers that fail to comply with the information requests within 90 days would be imposed fines of up to $100,000.

Takings Clause

William A. Sarraille, attorney at Sidley Austin LLP, a law firm that represents pharmaceutical companies including Pfizer and AstraZeneca, said that the CMS’s new drug price reporting rules violate legal protections for trade secrets. He also said mandating that companies share financially sensitive proprietary data breaches the takings clause of the Fifth Amendment, which bars taking private property for public use without just compensation.

“What the [drug companies] are saying is that since the statute doesn’t authorize the scope of the survey information that’s being mandated—and there’s concern regarding trade secret information being disclosed to the public and therefore the value of the trade secret being undermined—that this amounts to a regulatory taking without just compensation,” Sarraille said.

Edwin Park, a research professor at the Georgetown Center for Children and Families, pushed back against claims that the CMS lacks authority to require drugmaker surveys. Park said Section 1927(b)(3)(B) of the Social Security Act has allowed the CMS to survey manufacturers since the Medicaid Drug Rebate Program began in 1991. However, the CMS has refrained from exercising this power until now.

The act permits the CMS to “survey wholesalers and manufacturers that directly distribute their covered outpatient drugs, when necessary, to verify manufacturer prices,” Park said.

The takings clause argument echoes that made by several drugmakers challenging the Medicare drug pricing provisions of the Inflation Reduction Act. Merck & Co. and Bristol-Myers Squibb Co. argue in their lawsuits that patented drugs are “protected from uncompensated takings” under the takings clause. Johnson & Johnson and Astellas Pharma Inc. also cited the takings clause in their litigation against the IRA.

Top courts have stuck down such claims in challenges to other federal programs, including the Affordable Care Act, the No Surprises Act, and the 340B drug pricing program.

Park argues that the CMS survey, while not ideal for drug companies, would give state Medicaid agencies the information they need to negotiate fairer drug prices with manufacturers. That’s a better option than the alternative, where states looking to lower spending on drugs could implement a closed Medicaid formulary that would cover just one drug per class, excluding high-cost drugs based on price alone, he said.

‘Best Price’ Debate

Another contentious aspect of the proposed rule is the CMS’s move to redefine and clarify established terms within the Medicaid statute, lawyers say.

According to Sarraille, a provision within the proposed rule would fundamentally alter how drug manufacturers calculate Medicaid rebates by modifying the regulatory definition of “best price” to require manufacturers to stack, or aggregate, all discounts and rebates across the pharmaceutical supply chain when determining the lowest net price for a drug.

“Best price has historically been understood [by drugmakers] as the best price offered to any one included purchaser within the statute. So if there’s a 40% discount to a particular managed care entity, that would be one potential best price point. And then if there’s a 10% discount to a retail pharmacy chain that would be another potential best price point,” Sarraille said.

“What CMS is proposing to do is not to consider those different potential price points, but to say, if the pill goes through the retail pharmacy, and is ultimately paid by the managed care entity, then the best price is not the higher of 40 or 10% off. It’s both 40% plus 10% off,” he said.

Legal challenges by drug manufacturers argue the existing regulations are vague on whether stacking is required.

The US Supreme Court recently ordered the US Court of Appeals for the Fourth Circuit to rehear an appeal of a lower court’s decision in U.S. ex rel. Sheldon v. Allergan. The lower court dismissed a complaint alleging the drugmaker violated the False Claims Act because it chose not to stack discounts provided to separate entities.

The district court had ruled in favor of the manufacturer, finding the company’s interpretation against stacking was “objectively reasonable” since CMS regulations hadn’t explicitly required it.

To assuage any doubt over the agency’s intentions, the CMS proposed rule added explicit language to its regulatory statement that “manufacturer[s] must adjust the best price for a covered outpatient drug for a rebate period if cumulative discounts, rebates or other arrangements to best price eligible entities subsequently adjust the price available from the manufacturer for the drug.”

Need for Negotiation

Peter Pitts, president and co-founder of the Center for Medicine in the Public Interest and a former associate commissioner of the Food and Drug Administration under President George W. Bush, said it’s going to take negotiation on both sides in order to avoid litigation.

Pitts was critical of the CMS’s approach, saying it wasn’t “collegial.” Of the proposed rule, he said, “all they change is CMS’s ability to—not clarify the rules, but change the rules as they see fit.”

“The problem right now is that both sides aren’t negotiating in good faith,” he said.

Posted on

CMS Issues Proposed Rule Regarding Medicaid Drug Rebate Program

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: CMS pushes forward with the rule that will survey manufacturers on how they set prices AND penalize ones that incorrectly misclassify drugs in order to pay less rebates.



Clipped from:

In late-May, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program (MDRP). The proposed rule addresses drug misclassification and drug pricing and product data misreporting by pharmaceutical manufacturers. Also important for manufacturers, the rules propose program integrity and program administration changes, including limiting the time within which a manufacturer can initiate an audit of a State Medicaid Program’s drug utilization for purposes of Medicaid rebate obligations; clarifying requirements to accumulate or “stack” price concessions when a manufacturer determines best price; and providing for drug price verification and transparency through data collection.

“With today’s proposed rule, we are advancing unprecedented efforts to increase transparency in prescription drug costs, being good stewards of the Medicaid program, and protecting its financial integrity. This proposed rule will save both states and the federal government money,” Department of Health and Human Services Secretary Xavier Becerra said in a statement.

Some Important Parts of Proposed Rule

CMS is proposing to verify certain drug prices reported by manufacturers through an annual Medicaid Drug Price Verification Survey. According to CMS, verifying drug prices and publishing non-proprietary information about drug prices will increase public transparency for high-cost drugs allowing state Medicaid agencies to negotiate covered outpatient drug (“COD”) prices more effectively with manufacturers.

Only a select number of manufacturers of single-source CODs would be surveyed. CMS would develop a list of high-priced CODs which it estimates would be approximately 160 drug products or 200 national drug codes (“NDCs”). It would then narrow the list to between three and 10 NDCs by excluding CODs for which a manufacturer participates in certain CMS drug pricing programs or pays a significant amount in supplemental rebates to at least 50 percent of states. The manufacturers of the three to 10 NDCs selected would receive a Medicaid Drug Price Verification Survey.

Additionally, the proposed rules also seek to address situations in which manufacturers incorrectly report or misclassify their drugs in the MDRP. Misclassifying a brand-name drug as a generic drug reduces a manufacturer’s Medicaid rebate payments. CMS intends to define the situations in which it would consider a drug misclassified for the purposes of the MDRP, as well as other situations in which a manufacturer is paying rebates to states that are different from the rebates that are supported by the drug data being reported. CMS also would develop a process and timeline to notify manufacturers that it has determined that a misclassification of a COD has occurred, and the process for correcting the misclassification.

The proposed rules would codify a manufacturer’s obligation to pay unpaid rebate amounts to states due to the misclassification(s) and describe actions CMS may take if a manufacturer fails to correct a misclassification, including CMS correcting the misclassification, suspension of the drug and/or its manufacturer from the MDRP, exclusion of the misclassified drug from being eligible for Medicaid reimbursement, and potential civil monetary penalties.

Further, CMS proposes to revise the rules governing the determination of best price, to require that “[c]umulative discounts, rebates or other arrangements must be stacked to generate a final price realized by the manufacturer for a covered outpatient drug, including discounts, rebates or other arrangements provided to different best price eligible entities”. CMS notes, as an example, that, “if a manufacturer provides a discount to a wholesaler, then a rebate to the provider who dispensed the drug unit, and then another rebate to the insurer who covered that drug unit, CMS has concluded that ‘best price’ must include (or ‘stack’) all the discounts and rebates associated with the final price, even if the entity did not buy the drug directly from the manufacturer.”

Among many other proposals, CMS is proposing to require Medicaid managed care plans that cover CODs “to structure any contract with any subcontractor [(e.g., PBMs)] for the delivery or administration of the COD benefit [to] require the subcontractor to report separately the amounts related to the incurred claims,” including amounts related to “reimbursement for . . . CODs, payments for other patient services, and the dispensing or administering providers fees, and subcontractor administrative fees.” CMS believes this information would improve the calculation and reporting of the Medicaid Loss Ratio and would also require PBMs to report to plans on the spread between reimbursement paid to pharmacies and amounts charged to Medicaid managed care plans.

Posted on

RX- Antipsychotic Medication Use In Medicaid-Insured Children Decreased Substantially Between 2008 And 2016

MM Curator summary

The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


[MM Curator Summary]: Celebrating that now only 55% of Medicaid kids getting a powerful antipsychotic med are missing a relevant diagnosis to validate they need it or suggest are getting their care managed.



Clipped from:


After the rapid growth of pediatric antipsychotic prescribing in the early 2000s, especially in the Medicaid population, concerns regarding the safety and appropriateness of such prescribing increased. Many states implemented policy and educational initiatives aimed at safer and more judicious antipsychotic use. Antipsychotic use leveled off in the late 2000s, but there have been no recent national estimates of trends in antipsychotic use in children enrolled in Medicaid, and it is unclear how use varied by race and ethnicity. This study observed a sizable decline in antipsychotic use among children ages 2–17 between 2008 and 2016. Although the magnitude of change varied, declines were observed across foster care status, age, sex, and racial and ethnic groups studied. The proportion of children with an antipsychotic prescription who received any diagnosis associated with a pediatric indication that was approved by the Food and Drug Administration increased from 38 percent in 2008 to 45 percent in 2016, which may indicate a trend toward more judicious prescribing.





  • 1 Centers for Medicare and Medicaid Services Medicaid Integrity Group. Atypical antipsychotic medications: use in pediatric patients [Internet]. Baltimore (MD): CMS; 2015 Oct [cited 2023 Apr 27]. Available from:
    Google Scholar

  • 2 Galling B, Roldán A, Nielsen RE, Nielsen J, Gerhard T, Carbon Met al. Type 2 diabetes mellitus in youth exposed to antipsychotics: a systematic review and meta-analysis. JAMA Psychiatry. 2016;73(3):247–59. Crossref, MedlineGoogle Scholar
  • 3 Ray WA, Stein CM, Murray KT, Fuchs DC, Patrick SW, Daugherty Jet al. Association of antipsychotic treatment with risk of unexpected death among children and youths. JAMA Psychiatry. 2019;76(2):162–71. Crossref, MedlineGoogle Scholar
  • 4 Libowitz MR, Nurmi EL. The burden of antipsychotic-induced weight gain and metabolic syndrome in children. Front Psychiatry. 2021;12:623681. Crossref, MedlineGoogle Scholar
  • 5 Jensen KG, Correll CU, Rudå D, Klauber DG, Decara MS, Fagerlund Bet al. Cardiometabolic adverse effects and its predictors in children and adolescents with first-episode psychosis during treatment with quetiapine-extended release versus aripiprazole: 12-week results from the Tolerance and Effect of Antipsychotics in Children and Adolescents with Psychosis (TEA) Trial. J Am Acad Child Adolesc Psychiatry. 2019;58(11):1062–78. Crossref, MedlineGoogle Scholar
  • 6 Crystal S, Mackie T, Fenton MC, Amin S, Neese-Todd S, Olfson Met al. Rapid growth of antipsychotic prescriptions for children who are publicly insured has ceased, but concerns remain. Health Aff (Millwood). 2016;35(6):974–82. Go to the articleGoogle Scholar
  • 7 Patten SB, Waheed W, Bresee L. A review of pharmacoepidemiologic studies of antipsychotic use in children and adolescents. Can J Psychiatry. 2012;57(12):717–21. Crossref, MedlineGoogle Scholar
  • 8 Crystal S, Olfson M, Huang C, Pincus H, Gerhard T. Broadened use of atypical antipsychotics: safety, effectiveness, and policy challenges. Health Aff (Millwood). 2009;28(5):w770–81. Go to the articleGoogle Scholar
  • 9 Mackie TI, Hyde J, Palinkas LA, Niemi E, Leslie LK. Fostering psychotropic medication oversight for children in foster care: a national examination of states’ monitoring mechanisms. Adm Policy Ment Health. 2017;44(2):243–57. Crossref, MedlineGoogle Scholar
  • 10 Spence O, Reeves G, dosReis S. Spillover effects of state Medicaid antipsychotic prior authorization policies in US commercially insured youth. Pharmacoepidemiol Drug Saf. 2020;29(9):1064–71. Crossref, MedlineGoogle Scholar
  • 11 Bushnell GA, Crystal S, Olfson M. Trends in antipsychotic medication use in young privately insured children. J Am Acad Child Adolesc Psychiatry. 2021;60(7):877–86. Crossref, MedlineGoogle Scholar
  • 12 Edelsohn GA, Karpov I, Parthasarathy M, Hutchison SL, Castelnovo K, Ghuman Jet al. Trends in antipsychotic prescribing in Medicaid-eligible youth. J Am Acad Child Adolesc Psychiatry. 2017;56(1):59–66. Crossref, MedlineGoogle Scholar
  • 13 Nunes JC, Naccarato T, Stafford RS. Antipsychotics in the California foster care system: a 10-year analysis. J Child Adolesc Psychopharmacol. 2022;32(7):400–7. Crossref, MedlineGoogle Scholar
  • 14 Cataife G, Weinberg DA. Racial and ethnic differences in antipsychotic medication use among children enrolled in Medicaid. Psychiatr Serv. 2015;66(9):946–51. Crossref, MedlineGoogle Scholar
  • 15 To access the appendix, click on the Details tab of the article online.
  • 16 Centers for Medicare and Medicaid Services. DQ Atlas [Internet]. Baltimore (MD): CMS; [cited 2023 Apr 27]. Available from:
    Google Scholar

  • 17 Nguyen JK, Sanghavi P. A national assessment of legacy versus new generation Medicaid data. Health Serv Res. 2022;57(4):944–56. Crossref, MedlineGoogle Scholar
  • 18 Schmid I, Burcu M, Zito JM. Medicaid prior authorization policies for pediatric use of antipsychotic medications. JAMA. 2015;313(9):966–8. Crossref, MedlineGoogle Scholar
  • 19 Zito JM, Burcu M, McKean S, Warnock R, Kelman J. Pediatric use of antipsychotic medications before and after Medicaid peer review implementation. JAMA Psychiatry. 2018;75(1):100–3. Crossref, MedlineGoogle Scholar
  • 20 Foti ME, Harper G, Moon R, Oestreich G, Snow R, Thompson Jet al. Antipsychotic medication use in Medicaid children and adolescents: report and resource guide from a 16-state study [Internet]. New Brunswick (NJ): Rutgers Center for Education and Research on Mental Health Therapeutics; 2010 Jun [cited 2023 Apr 27]. Available from:…en_Report_and_Resource_Guide_Final.pdf
    Google Scholar

  • 21 National Committee for Quality Assurance. HEDIS measures for the safe & judicious use of antipsychotic medications in children and adolescents [Internet]. Washington (DC): NCQA; [cited 2023 Apr 27]. Available from:
    Google Scholar

  • 22 Department of Health and Human Services. 2015 annual report on the quality of care for children in Medicaid and CHIP [Internet]. Washington (DC): HHS; 2016 Feb [cited 2023 Jun 14]. Available from:
    Google Scholar

  • 23 Akincigil A, Mackie TI, Cook S, Hilt RJ, Crystal S. Effectiveness of mandatory peer review to reduce antipsychotic prescriptions for Medicaid-insured children. Health Serv Res. 2020;55(4):596–603. Crossref, MedlineGoogle Scholar
  • 24 Mackie TI, Cook S, Crystal S, Olfson M, Akincigil A. Antipsychotic use among youth in foster care enrolled in a specialized managed care organization intervention. J Am Acad Child Adolesc Psychiatry. 2020;59(1):166–176.e3. Crossref, MedlineGoogle Scholar
  • 25 Finnerty M, Neese-Todd S, Bilder S, Olfson M, Crystal S. Best practices: MEDNET: a multistate policy maker–researcher collaboration to improve prescribing practices. Psychiatr Serv. 2014;65(11):1297–9. Crossref, MedlineGoogle Scholar
  • 26 Findling RL, Drury SS, Jensen PS, Rapoport JL, Bukstein OG, Walter HJet al. Practice parameter for the use of atypical antipsychotic medications in children and adolescents [Internet]. Washington (DC): American Academy of Child and Adolescent Psychiatry; c 2011 [cited 2023 Apr 27]. Available from:
    Google Scholar

  • 27 Scotto Rosato N, Correll CU, Pappadopulos E, Chait A, Crystal S, Jensen PSet al. Treatment of maladaptive aggression in youth: CERT guidelines II. Treatments and ongoing management. Pediatrics. 2012;129(6):e1577–86. Crossref, MedlineGoogle Scholar
  • 28 Penfold RB, Thompson EE, Hilt RJ, Kelleher KJ, Schwartz N, Beck Aet al. Safer Use of Antipsychotics in Youth (SUAY) pragmatic trial protocol. Contemp Clin Trials. 2020;99:106184. Crossref, MedlineGoogle Scholar
  • 29 Stroup TS, Gerhard T, Crystal S, Huang C, Olfson M. Comparative effectiveness of clozapine and standard antipsychotic treatment in adults with schizophrenia. Am J Psychiatry. 2016;173(2):166–73. Crossref, MedlineGoogle Scholar
  • 30 Olfson M, Gerhard T, Huang C, Lieberman JA, Bobo WV, Crystal S. Comparative effectiveness of second-generation antipsychotic medications in early-onset schizophrenia. Schizophr Bull. 2012;38(4):845–53. Crossref, MedlineGoogle Scholar
  • 31 National Institute for Health and Care Excellence. Psychosis and schizophrenia in children and young people: recognition and management [Internet]. London: NICE; 2013 Jan 23 [last updated 2016 Oct 26; cited 2023 Apr 27]. Available from:
    Google Scholar

  • 32 Morrison AP, Pyle M, Maughan D, Johns L, Freeman D, Broome MRet al. Antipsychotic medication versus psychological intervention versus a combination of both in adolescents with first-episode psychosis (MAPS): a multicentre, three-arm, randomised controlled pilot and feasibility study. Lancet Psychiatry. 2020;7(9):788–800. Crossref, MedlineGoogle Scholar
  • 33 Cook BL, Carson NJ, Kafali EN, Valentine A, Rueda JD, Coe-Odess Set al. Examining psychotropic medication use among youth in the U.S. by race/ethnicity and psychological impairment. Gen Hosp Psychiatry. 2017;45:32–9. Crossref, MedlineGoogle Scholar
  • 34 Heun-Johnson H, Menchine M, Axeen S, Lung K, Claudius I, Wright Tet al. Association between race/ethnicity and disparities in health care use before first-episode psychosis among privately insured young patients. JAMA Psychiatry. 2021;78(3):311–9. Crossref, MedlineGoogle Scholar
  • 35 Corbie-Smith G, Thomas SB, St George DM. Distrust, race, and research. Arch Intern Med. 2002;162(21):2458–63. Crossref, MedlineGoogle Scholar
  • 36 DeLuca JS, Novacek DM, Adery LH, Herrera SN, Landa Y, Corcoran CMet al. Equity in mental health services for youth at clinical high risk for psychosis: considering marginalized identities and stressors. Evid Based Pract Child Adolesc Ment Health. 2022;7(2):176–97. Crossref, MedlineGoogle Scholar
  • 37 Vanderwerker L, Akincigil A, Olfson M, Gerhard T, Neese-Todd S, Crystal S. Foster care, externalizing disorders, and antipsychotic use among Medicaid-enrolled youths. Psychiatr Serv. 2014;65(10):1281–4. Crossref, MedlineGoogle Scholar
  • 38 Tan C, Greiner MV, Nause K, Shahabuddin Z, Beal SJ. Mental health diagnoses, health care utilization, and placement stability on antipsychotic prescribing among foster care youth. Acad Pediatr. 2023;23(3):675–80. Crossref, MedlineGoogle Scholar
  • 39 Dosreis S, Yoon Y, Rubin DM, Riddle MA, Noll E, Rothbard A. Antipsychotic treatment among youth in foster care. Pediatrics. 2011;128(6):e1459–66. Crossref, MedlineGoogle Scholar
  • 40 Leckman-Westin E, Finnerty M, Scholle SH, Pritam R, Layman D, Kealey Eet al. Differences in Medicaid antipsychotic medication measures among children with SSI, foster care, and income-based aid. J Manag Care Spec Pharm. 2018;24(3):238–46. Crossref, MedlineGoogle Scholar
  • 41 Lohr WD, Jawad K, Feygin Y, Le J, Creel L, Pasquenza Net al. Antipsychotic medications for low-income preschoolers: long duration and psychotropic medication polypharmacy. Psychiatr Serv. 2022;73(5):510–7. Crossref, MedlineGoogle Scholar
  • 42 Olfson M, King M, Schoenbaum M. Treatment of young people with antipsychotic medications in the United States. JAMA Psychiatry. 2015;72(9):867–74. Google Scholar
  • 43 Patel H, Barnes J, Osazuwa-Peters N, Bierut LJ. Association of state Medicaid expansion status with rates of suicide among US adults. JAMA Netw Open. 2022;5(6):e2217228. Crossref, MedlineGoogle Scholar
  • 44 Sommers BD, Blendon RJ, Orav EJ, Epstein AM. Changes in utilization and health among low-income adults after Medicaid expansion or expanded private insurance. JAMA Intern Med. 2016;176(10):1501–9. Crossref, MedlineGoogle Scholar
Posted on

Ohio Medicaid chief dodges when asked to explain business with company AG said “fleeced” taxpayers

MM Curator summary


Ohio Medicaid officials are given hard questions about awarding a contract to Centene, who recently paid an $88M fine related to the PBM spread-pricing scandal.


The article below has been highlighted and summarized by our research team. It is provided here for member convenience as part of our Curator service.


Massive contract restarted after settlement


The Centene Corporation headquarters. Photo from Google Maps.

Ohio Medicaid Director Maureen Corcoran didn’t give many straight answers Wednesday when she was pressed about why her agency restarted a massive contract with a company that earlier this year was accused of “fleecing” taxpayers out of tens of millions of dollars.

At one point, Corcoran even invoked lawyer-client privilege to avoid answering a question.

Appearing on WOSU’s “All Sides With Ann Fisher,” Corcoran was asked by Fisher why her agency would again trust Centene, the largest Medicaid managed-care contractor in the United States. The department earlier this month restarted negotiations for a 2022 contract with the company. 

That was just six months months after Ohio Attorney Dave Yost announced that Centene had agreed to pay $88.3 million to settle claims that the company had improperly inflated pharmacy claims by massive amounts. Centene also announced that it was setting aside more than $1 billion to settle similar claims in 21 other states. 

The company has emphasized that it didn’t admit to any wrongdoing in the settlement. But in March, Yost was unequivocal when he filed the suit.

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

The Medicaid department announced that it was restarting negotiations with Centene by posting a press release to its website saying the agency was giving Ohio Medicaid clients “more options.” It only alluded to the lawsuit by saying negotiations had been paused because of it and now that the suit had been settled, a contract would be awarded.

Asked at the time why the agency should now trust Centene with taxpayers’ billions, a Medicaid spokeswoman didn’t answer, other than to refer to the press release.

Fisher on Monday sought to press the question with Corcoran, asking why the agency would trust a company the state AG had just accused of fleecing taxpayers. Corcoran’s response was meandering.

“The action that was brought by the attorney general was really separate from the procurement process that we were engaged in which was of course very rigorous,” she said. “It is very common, normal practice in Medicaid that when there are any kinds of legal actions against any kind of managed care provider or a hospital or whomever, we have them identify that, we look into that. 

“So we are aware of and looking into legal actions whether here in Ohio or elsewhere is part of the normal Medicaid application process. So of course when we heard the attorney general was going to bring this action, we in similar fashion as I just mentioned took a step back and said we are going to make our own assessment. The attorney general then settled the case.

“There were still several weeks as you know that passed and we were making our own assessment at the same time and determined that we were going to proceed with them as part of our newly selected group of plans. They also, you may remember, scored the second-highest score (in a competitive procurement) from a quality point of view, so they provide good care, they’ve been a partner in Ohio.”

Transcripted excerpt of Corcoran’s interview on “All Sides with Ann Fisher.”


Ohio Medicaid Director Maureen Corcoran. Official photo.

Corcoran then pointed out that Centene’s alleged ripoff had to do with pharmacy benefits. She seemed to imply that since Centene wouldn’t have responsibility for the service under the new setup, there’s nothing to worry about.

“But I also think one thing that’s important to mention is that the issue that the attorney general brought has to do with pharmacy benefit managers and the role that they play with medications,” Corcoran said. “Two years ago, our General Assembly passed a law taking that responsibility away from the managed care plans and instructing the Department of Medicaid to set up a separate pharmacy benefit manager. 

“So, in essence, it was important for us to have good business partners, but in essence the underlying problem… and corporate oversight has changed and that set of responsibilities as part of our new design will not be with the individual plans, but will be managed directly by the state.”

How, Fisher asked, had Centene’s corporate oversight changed. Corcoran didn’t really answer, saying instead “we interact with them as a business partner” and that her team was making sure there will “be appropriate ethical training and that there be oversight and compliance monitoring.”

Then Corcoran was asked, since the Ohio attorney general acts as the Medicaid department’s lawyer, whether she had sought legal advice from Yost before deciding to continue the state’s business with Centene.

“As you know, attorneys and clients have a certain legal protection that, if I were aware of any of that, I wouldn’t be able to share it with you anyway,” Corcoran said in a reference to attorney-client privilege. That’s a doctrine that prevents an attorney from discussing privileged matters, but places no such restriction on the client.

Fisher again tried to get Corcoran to explain why she trusted Centene to be a good steward of Ohio’s money — this time in the toughest terms.

“Why would you continue to do business with a company that, as Attorney General Yost said, fleeced taxpayers out of millions?” Fisher asked. “It sounds like you’re doing business with a con man.”

Corcoran didn’t answer the question, instead launching into a 270-word talk about how rapidly the Medicaid program had grown and how the General Assembly has taken steps to reform how the agency handles drug transactions.

Corcoran did, however, answer one question directly.

It came to light this week that Michael Kiggin — a longtime friend of Gov. Mike DeWine — registered to lobby on Centene’s behalf just before Yost sued the company. Among the agencies Kiggin said he’d lobby were the governor’s office and the Medicaid department.

Asked if she knew Kiggin and whether Kiggin had communicated with her about the Centene contract, Corcoran said, “I don’t know Michael Kiggin. I’ve not talked with him, so I can’t really comment on that.”

Asked if Kiggin had communicated with Medicaid staff — including those involved in the Centene contract, Corcoran said, “Absolutely not.”

Clipped from: