Walgreens Boots Alliance Inc. has entered into an agreement with federal prosecutors in Manhattan to settle Medicaid and Medicare fraud allegations in two separate actions brought against the national pharmacy chain, according to court records unsealed by U.S. District Judge Paul Crotty of the Southern District of New York.
The first settlement, approved on January 16, 2019 requires Walgreens to pay $209.2 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them.
The second settlement, approved on January 15, 2019, requires Walgreens to pay $60 million to resolve allegations that it overbilled Medicaid by failing to disclose to and charge Medicaid the lower drug prices that Walgreens offered the public through a discount program.
The settlement requires Walgreens to pay approximately $168 million to the United States, and Walgreens has agreed separately to pay approximately $41.2 million to state governments.
In both settlements, prosecutors say Walgreens admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act.
According to federal prosecutors, the insulin fraud occurred through two specific Walgreens policies. First, the company’s electronic management system prevented pharmacists from dispensing partial boxes of insulin pens, even when a patient didn’t require that much insulin.
Second, when the amount distributed exceeded what was prescribed for a total number of daily doses, Walgreens falsely stated in reimbursement forms that what was handed out did not go over that limit. As part of the other fraudulent scheme, Walgreens used its Prescription Savings Program to overcharge federal health care programs, according to prosecutors.
While it was providing customers a discount on drugs ordered through the program, Walgreens was failing to tell Medicaid what the prices were when it billed for reimbursement. This led to Medicaid paying more than it should have for the discounted medications.
In a statement provided by a Walgreens spokesman, the company said it was pleased to have the issues resolved. The company claimed to have fully cooperated with the government, and to have admitted to no wrongdoing.