Walgreens pays hefty penalty to settle Medicaid fraud claims

October 7, 2008  |  Press Releases

Walgreens has settled a fraud investigation launched by the federal government after two Minnesota pharmacists blew the whistle on the company for overcharging Medicaid in connection with prescription drugs. In Minnesota, Michigan, Florida and Massachusetts, when a person is covered under both Medicaid and private insurance, a pharmacy is only permitted to bill Medicaid for the copay amount. But Walgreens was alleged to have charged those four states’ Medicaid programs the difference between the amount paid by the private insurance companies for the drugs and the amount the four state Medicaid programs would have paid had there not been private insurance. Walgreens’ improper billing practices brought in substantial revenue for the company—revenue to which it was not entitled.

The federal government looked into the pharmacy’s practices after two whistle-blowers working for the company in Minnesota, Daniel Bieurance and Neil Thompson, filed a lawsuit under the False Claims Act. Under the qui tam provision of that statute, a private citizen is allowed to institute a claim for fraud on the government’s behalf and to share in any money received. Both whistle-blowers in the Walgreens suit will share in the recent settlement. One of the men still works for Walgreens, and the other is now working as a pharmacist elsewhere.

For the full story, go to the Star Tribune.

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