Attorney General Leslie Rutledge announced today a $15.2 million settlement with Centene Corporation and three subsidiaries for overcharging the state Medicaid program for medication.

The settlement is also with subsidiaries Arkansas Total Care, Centene Management Company and Envolve Pharmacy Solutions.

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Envolve, a pharmacy benefits manager, managed the state Medicaid prescription drug program.  By an account from an attorney general’s news release:

PBMs, such as Envolve, contract with and reimburse pharmacies for drugs, create preferred drug lists, and negotiate rebates with pharmaceutical companies. Envolve subcontracted its responsibilities for the payment of pharmacies to CVS Caremark.  When Envolve reported to Arkansas Medicaid the costs paid to pharmacies for the drugs, Envolve reported inflated amounts of pharmacy costs by failing to disclose substantial discounts in ingredient costs and dispensing fees which Envolve received under the Envolve-CVS subcontract. This conduct by Envolve occurred in 2017 and 2018 and ended with termination of the Envolve-CVS subcontract.

Centene must pay the $15 million in two installments within the next 13.5 months. It also must provide an accounting of all pharmacy benefit claims, including the amount paid to pharmacies.

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The news release didn’t say who will receive the money. At a news conference, Rutledge said Medicaid would be repaid first and then any overage would go to her consumer fund, but she didn’t specify how much that might be.

Rutledge in the past has kept some money won in litigation for the consumer education account she’s used to promote herself in public service announcements (some $3 million worth in recent years). That practice is under challenge in a lawsuit that Circuit Judge Chip Welch refused to dismiss this week. Today, Rutledge asked the Arkansas Supreme Court to take up her argument that she is immune from lawsuit as a state official. The taxpayers’ lawsuit, which challenges Rutledge’s PR expenditures and her involvement in out-of-state lawsuits defending the likes of the NRA, says state immunity doesn’t apply when state officials spend money illegally. The lawsuit contends Rutledge, a Republican candidate for governor, has done this.

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Rutledge previously went to the U.S. Supreme Court successfully to defend Arkansas regulations on pharmacy benefit managers. Arkansas pharmacies are still tussling with the benefit managers. One bone of contention is the allegation that the managers aren’t paying pharmacies at or above their acquisition cost for generic drugs.

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