Walgreen Agrees To Pay $9.9M To Department Of Justice, Four States To Settle Allegations Company Overbilled Medicaid

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance
Article Date: 01 Oct 2008 - 11:00 PDT

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Walgreen has agreed to pay $9.9 million to settle allegations by the Department of Justice and four states -- Florida, Massachusetts, Michigan and Minnesota -- that the company improperly billed Medicaid, DOJ said in a statement on Monday, the Miami Herald reports (Miami Herald, 9/30).

According to DOJ, the allegations involved Medicaid claims for medications dispensed to beneficiaries who also had private health insurance. DOJ said that Walgreen charged the Medicaid programs in the four states the difference between the amount that private insurers paid for the medications and the amount that the programs would have paid for beneficiaries who did not have private health insurance (Kendall, Dow Jones/Wall Street Journal, 9/29). In those four states, Walgreen can bill Medicaid programs only for the amount of copayments for medications dispensed to beneficiaries who also have private health insurance, DOJ said. DOJ did not disclose whether Walgreen admitted any wrongdoing as part of the settlement (Miami Herald, 9/30).

The allegations against Walgreen resulted from a whistle-blower lawsuit filed by Daniel Bieurance and Neil Thompson, two pharmacists in Minneapolis. Under the settlement, the pharmacists will receive a combined $1.44 million.

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Michael Polzin, a spokesperson for Walgreen, attributed the allegations that the company improperly billed Medicaid to "inadvertent ... errors" that resulted from a "unique requirement for Medicaid billing when Medicaid is a secondary insurer" (Walsh, Minneapolis Star Tribune, 9/29). He added that Walgreen has corrected the problem.

Gregory Katsas, assistant attorney general for the civil division at DOJ, said, "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" (Kendall, Dow Jones/Wall Street Journal, 9/29).

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