Centene, the country's largest seller of Medicaid health plans, will pay $88 million to Ohio and $55 million to Mississippi in restitution. The company denies liability for the practices for which it is settling.
Medicaid provides health coverage to eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. Medicaid is administered by the states and funded jointly by the states and the federal government.
The company also said it reserved $1.1 billion to resolve similar claims in other states.
Centene shares at last check were down 1.7% to $69.61.
The shares are up more than 10% since Ohio's attorney general first filed the state's lawsuit against the St. Louis company.
"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," Brent Layton, Centene's president for health plans, said in a statement.
The company says it is in discussions with a plaintiff's group to head off similar legal actions being taken in other states.
A number of state attorneys general have brought litigation against the company related to the Envolve Pharmacy Solutions pharmacy-benefits subsidiary.
In March, Ohio sued, alleging the company's Ohio subsidiary used a network of pharmacy benefits subcontractors to misrepresent pharmacy costs, leading to millions of dollars of overpayments by the Ohio Department of Medicaid.
At the time, Centene called the allegations "unfounded" while also claiming that the company's services "saved millions of taxpayer dollars for Ohioans."