Settlement Reached in Walgreens Prescription Billing Case

Walgreens has agreed to pay $106.8 million to settle allegations of fraudulent billing to government healthcare programs, raising questions about corporate accountability in the pharmaceutical industry.

At a Glance

Walgreens will pay $106.8 million to resolve alleged False Claims Act violations.
The company allegedly billed for prescriptions never dispensed between 2009 and 2020.
Walgreens was accused of receiving tens of millions of dollars for prescriptions not provided to beneficiaries.
The settlement resolves cases in New Mexico, Texas, and Florida.
Whistleblowers will receive a combined $16.5 million for initiating investigations.

Walgreens Faces Hefty Settlement for Alleged Fraud

In a significant development that has caught the attention of the healthcare industry, Walgreens Boots Alliance Inc. and Walgreen Co. have agreed to pay $106.8 million to settle allegations that they violated the False Claims Act. The case, spanning over a decade from 2009 to 2020, involved the pharmacy giant allegedly billing government healthcare programs for prescriptions that were never actually dispensed to beneficiaries.

The settlement, announced by the U.S. Department of Justice, sheds light on the ongoing battle against healthcare fraud and the government’s commitment to protecting taxpayer-funded programs. Walgreens allegedly received tens of millions of dollars for prescriptions that were never provided to Medicare and Medicaid beneficiaries, raising serious concerns about the integrity of the company’s billing practices.

Walgreens has agreed to pay $106.8 million to resolve allegations it submitted false claims for payment to Medicare, Medicaid and other federal health care programs for prescriptions that it processed but were never picked up by patients from 2009 to 2020. https://t.co/1CfmpCahm9 pic.twitter.com/OICISV1vgZ

— OIG at HHS (@OIGatHHS) September 16, 2024

Breaking Down the Settlement

The $106.8 million settlement is divided into two main components. The federal government will recover $91,881,530, while $14,933,259 will be returned to individual states affected by the fraudulent claims. Notably, Walgreens had previously refunded $66,314,790, which has been credited against the total settlement amount.

“Federal health care programs provide critical health care services to millions of Americans,” said Principal Deputy Assistant Attorney General Brian M. Boynton, who leads the Justice Department’s Civil Division. “We will hold accountable those who abuse these programs by knowingly billing for goods or services they did not provide.”

The settlement resolves three separate cases filed under the qui tam, or whistleblower, provisions of the False Claims Act in New Mexico, Texas, and Florida. As a result of their efforts in uncovering the alleged fraud, whistleblowers Steven Turck and Andrew Bustos will receive substantial rewards of $14,918,675 and $1,620,000, respectively.

Walgreens’ Response and Remediation Efforts

While the settlement does not constitute an admission of liability by Walgreens, the company received credit for disclosing the problem, cooperating with the investigation, and implementing remediation measures. These efforts included enhancing its electronic pharmacy management system to prevent issues in the future.

Walgreens has blamed the billing errors on a software issue, stating that they have since corrected the problem and refunded overpayments.

“Adopting new technology and systems can be beneficial for providers, beneficiaries, and federal payors, including Medicare, Medicaid and TRICARE,” U.S. Attorney Damien M. Diggs for the Eastern District of Texas stated. “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.”

Implications for Healthcare Fraud Prevention

This case underscores the critical importance of robust oversight and accountability in the healthcare sector. The Department of Health and Human Services Office of Inspector General (HHS-OIG) played a key role in the investigation, demonstrating the government’s commitment to combating healthcare fraud.