Walgreens, one of the largest retail pharmacy chains in the United States, has reached a settlement of $106.8 million with the federal government. The settlement addresses allegations that Walgreens billed government healthcare programs for prescriptions that patients never received. This agreement, announced on September 13, resolves multiple lawsuits related to claims that Walgreens violated the False Claims Act and other state laws.
From 2009 to 2020, Walgreens allegedly submitted false claims for prescriptions to Medicare, Medicaid, and other federally funded healthcare programs, according to a Department of Justice (DOJ) press release. The accusations state that Walgreens processed prescriptions as dispensed, yet many of them were never actually retrieved by patients. Despite not providing the medications, the company received millions of dollars in reimbursements.
“Walgreens billed the government for prescriptions that never reached patients, which is a violation of the trust that is essential to our healthcare system,” said a representative of the DOJ.
Qui Tam Lawsuits Lead to Settlement
The settlement resolves multiple qui tam lawsuits, where private individuals, known as “relators,” filed legal actions on behalf of the government against Walgreens. Under the False Claims Act, these individuals can receive a portion of any settlement recovered. Relators can earn up to 30% of the government’s recovery in such cases.
One of these lawsuits was filed by Andrew Bustos on September 3, 2015. Bustos accused Walgreens of submitting false claims to the Medicare Part B Program from January 2009 to December 2015. These claims included medical equipment, prescription medications, and related supplies that were never provided to customers. Walgreens will pay $9 million to settle this part of the case, although it did not admit to any wrongdoing as part of the agreement.
As a result of the Bustos lawsuit, the U.S. government will pay Bustos $1.6 million for his role in exposing the alleged fraud.
Disclosures and Additional Lawsuits
The settlement also includes lawsuits filed by Steven Turck and Lince Jacob in 2019 and 2020, respectively. After Turck’s initial filing, Walgreens disclosed to the Office of Inspector General at the Department of Health and Human Services (HHS) that there were issues with its billing system. These issues caused the company to bill government programs for prescriptions that patients never picked up. The settlement noted that Walgreens used its Intercom Plus pharmacy management system to process the prescriptions, which were often marked as dispensed despite not being delivered within 30 days.
Walgreens cooperated with the investigation and has already refunded $66.3 million to the government for these improper claims. This amount will be credited against the final $106.8 million settlement.
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DOJ’s Efforts to Combat Healthcare Fraud
The Walgreens settlement comes amid broader efforts by the DOJ to crack down on healthcare fraud across the country. In a press conference on June 27, the DOJ announced a nationwide enforcement action that targeted companies engaging in fraudulent billing practices. This action led to criminal charges against 193 defendants and resulted in the recovery of millions of dollars.
“This settlement marks another major achievement in our ongoing commitment to combat healthcare fraud. It sends a message that entities that exploit healthcare programs for profit will be held accountable,” stated U.S. Attorney Roger B. Handberg for the Middle District of Florida.