Walgreen’s pays $9.86 Million to settle allegations of improper Medi‑Cal billings
April 20, 2017
• Government says Walgreen’s knowingly submitted improper claims for reimbursement
• “Regulations like those at issue here protect both critical funding and beneficiaries served”
The national drug store chain Walgreens has paid $9.86 million to resolve allegations that it violated the federal False Claims Act when it knowingly submitted claims for reimbursement to California’s Medi-Cal program that were not supported by applicable diagnosis and documentation requirements, says U.S. Attorney Phillip Talbert in Sacramento.
Walgreens, headquartered in Deerfield, Illinois, operates about 630 stores in California.
Medi-Cal utilizes a formulary list, commonly known as “Code 1” drugs, which designates certain restrictions for each listed drug, including restrictions pertaining to diagnoses. Medi-Cal will reimburse certain Code 1 drugs only for approved diagnoses, taking into account criteria such as the drug’s safety, efficacy, misuse potential, and cost.
The settlement resolves allegations that Walgreens failed to confirm and document required diagnoses, and in some instances dispensed drugs for non-approved diagnoses, then knowingly billed Medi-Cal for the prescriptions.
The allegations resolved by this settlement were first raised in two lawsuits filed against Walgreens under the whistleblower provisions of the False Claims Act by a former Walgreens pharmacist and a former pharmacy technician. The law allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblowers in this matter will collectively receive approximately $2.3 million of the recovery proceeds.
“Regulations like those at issue here protect both critical funding and beneficiaries served.” says Mr. Talbert.
The claims settled by this agreement are allegations only, and there has been no determination of liability.