Walgreens Pharmacy Chain Pays $7.9 Million to Resolve False Prescription Billing Case

On April 20, 2012, the Department of Justice announced that Walgreens, a national retail pharmacy chain has paid the United States and affiliated states a $7.9 million settlement to resolve allegations that the pharmacy violated the False Claims Act.  Walgreens, allegedly offered illegal incentives to beneficiaries of government health care programs which include Medicare, Medicaid, TRICARE, and the Federal Employees Health Benefits Program (FEHBP).  Incentives included gift cards, gift checks, and other monetary benefits that were offered to beneficiaries for transferring to Walgreens from other pharmacies.

The allegations were brought to the government in two separate whistleblower lawsuits filed under the qui tam provisions of the False Claims Act and statutes.  Relators, Cassie Bass a pharmacy technician and former Walgreens employee, and Jack Chin a pharmacist will receive $1,277,172 from the U.S. government for filing the actions.  The federal government will receive $7,298,124.

Barbara L. McQuade, U.S. Attorney for the Eastern District of Michigan states that patients should “make decisions based on legitimate health care needs.”  By luring customers in through gift cards and other enticements, Walgreens manipulated customers into selecting a pharmacy for the wrong reasons.  When a person’s health is at stake, the decision cannot be based on gifts.

Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice highlights the government’s dedication to protecting unsuspecting customers of prescription drugs.  He states that, “this case represents the government’s strong commitment to pursuing improper practices in the retail pharmacy industry that have the effect of manipulating patient decisions.”

The Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative was announced in May 2009 by Attorney General Eric Holder and Secretary of the Department of Health and Human Services Kathleen Sebelius.  The program was formed to reduce and prevent government health care fraud, which includes the Medicare and Medicaid programs.  By January 2009, the government had recovered  a total of $9 billion through one of its most powerful tools, the False Claims Act.

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