National retail pharmacy chain Walgreens has paid the United States government and four participating states $9.9 million to resolve allegations of falsely billing the Medicaid program.
Walgreens submitted claims to Medicaid agencies in four states for prescription drugs dispensed to persons covered both by Medicaid and private third-party insurance. The chain allegedly charged the four state Medicaid programs the difference between what the private insurance companies paid for the drugs and what the state Medicaid programs would have paid for the drugs in the absence of private insurance.
The U.S. government alleged the claims were false because the drug chain was entitled to reimbursement from the Medicaid programs only for the amount the Medicaid beneficiary would have been obligated to pay Walgreens had the claims been submitted solely to the private insurers. Typically this would have been the co-payment amount, yet government officials said Walgreens knowingly submitted claims to the Medicaid programs in excess of the co-pay amount.
As a result, officials said, Walgreens received reimbursement amounts from the states' Medicaid programs that were higher than it was entitled to receive.
"This settlement confirms that we will vigorously pursue allegations of fraud and abuse in state Medicaid programs, which are funded, in part, by the federal government," said Gregory Katsas, Assistant Attorney General for the Department of Justice's Civil Division.
The Justice Department initiated the investigation in response to a lawsuit brought by two pharmacists at Walgreens, Daniel Bieurance and Neil Thompson. Under the False Claims Act, private individuals can bring such actions for fraud on behalf of the United States and collect a share of any proceeds recovered.
Under various state False Claims Acts, private individuals can also bring actions for fraud on behalf of those states and receive a share of the proceeds. As a result of Tuesday's settlement, the two men will share $1,446,658.54 as their portion of the recovery.
The Justice Department's Civil Division and the U.S. Attorney's Office for the District of Minnesota handled the case jointly. The offices of the Attorney General for the states of Michigan, Florida and Minnesota and the Commonwealth of Massachusetts also participated.
"Healthcare fraud continues to be a priority for both the District of Minnesota and the Department of Justice nationwide," said U.S. Attorney Frank J. Magill. "Our office is gratified to see a substantial recovery of funds for the taxpayers, helping to ensure the continued availability of Medicare and Medicaid trust funds in the future."