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Fri Apr 21, 2017, 05:44 AM

Walgreen Co. Pays $9.86M to Settle Allegations of Improper Medi Cal Billings

https://www.justice.gov/usao-edca/pr/walgreen-co-pays-986m-settle-allegations-improper-medi-cal-billings
Department of Justice
U.S. Attorney’s Office
Eastern District of California

FOR IMMEDIATE RELEASE
Thursday, April 20, 2017

Walgreen Co. Pays $9.86M to Settle Allegations of Improper Medi Cal Billings

SACRAMENTO, Calif. — United States Attorney Phillip A. Talbert announced today that Walgreen Co. (Walgreens) has paid $9.86 million to resolve allegations that it violated the federal False Claims Act when it knowingly submitted claims for reimbursement to California’s Medi-Cal program that were not supported by applicable diagnosis and documentation requirements.
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Medi-Cal utilizes a formulary list, commonly known as “Code 1” drugs, which designates certain restrictions for each listed drug, including restrictions pertaining to diagnoses. Medi-Cal will reimburse certain Code 1 drugs only for approved diagnoses, taking into account criteria such as the drug’s safety, efficacy, misuse potential, and cost. Pharmacies serve the critical gatekeeping function of confirming and certifying that these Code 1 drugs are dispensed for the approved diagnoses. Walgreens may bill for drugs prescribed outside of the approved diagnoses, but it must submit a request to DHCS that includes a justification for the non‑approved use. Today’s settlement resolves allegations that Walgreens failed to confirm and document the requisite diagnoses, and in some instances dispensed drugs for non-approved diagnoses, then knowingly billed Medi-Cal for these prescriptions.

The allegations resolved by this settlement were first raised in two lawsuits filed against Walgreens under the qui tam, or whistleblower, provisions of the False Claims Act by a former Walgreens pharmacist and a former pharmacy technician. The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery. The whistleblowers in this matter will collectively receive approximately $2.3 million of the recovery proceeds.
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