Walgreens has agreed to pay $106 million to settle lawsuits alleging that the pharmacy chain submitted false claims to government health care programs for never-dispensed prescriptions. The settlement addresses allegations raised in lawsuits filed in New Mexico, Texas, and Florida by former Walgreens’ pharmacy operations employees.
Background on the Allegations
The lawsuits were initiated under the whistleblower provisions of the False Claims Act (FCA), which allows private individuals to file actions on behalf of the U.S. government against entities that commit fraud against government programs. Walgreens was accused of billing Medicare, Medicaid, and other federal health care programs for prescriptions that were processed but not picked up by patients between 2009 and 2020. The overpayments appear to result from a glitch in Walgreen’s billing software.
According to the Dept of Justice (DOJ) press release, “Walgreens received credit under the department’s guidelines for taking disclosure, cooperation, and remediation into account in False Claims Act cases. Among other actions, Walgreens implemented enhancements to its electronic pharmacy management system to prevent this from occurring in the future and self-reported certain conduct. Because Walgreens previously refunded $66,314,790 pertaining to the settled claims, Walgreens will receive a credit for this amount.”
Legal Implications of the Settlement
Walgreens stated that a software error led to the inadvertent billing of government programs. While the company did not admit legal liability, it acknowledged the issue and has improved its electronic management systems to prevent future occurrences.
Importance of Compliance: This settlement highlights the critical need for providers to be vigilant when adopting technology solutions. Damien M. Diggs, U.S. Attorney for the Eastern District of Texas, is quoted in the DOJ press release as saying, “Adopting new technology and systems can be beneficial for providers, beneficiaries, and federal payors, including Medicare, Medicaid and Tricare; however, we will not allow companies to hide behind their implementation of ill-conceived technology and systems that result in billing federal health care programs for goods and services never provided to beneficiaries. In those situations, we will pursue the companies and ensure that the taxpayer is made whole.”
In summary, Walgreens’ settlement of $106 million emphasizes the importance of carefully evaluating the efficacy of new software applications and technology solutions – failure to do so can result in costly penalties.
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