Walgreens Settles Whistleblower Suit over Alleged Medi-Cal Fraud
By the C|C Whistleblower Lawyer Team
Illinois-based drugstore giant Walgreens, with roughly 630 stores in California, agreed to pay $9.86 million to resolve allegations it violated the False Claims Act by knowingly submitting claims to California’s Medi-Cal program not supported by applicable diagnosis and documentation requirements. The Medi-Cal program, administered by the California Department of Health Care Services, provides health care to millions of Californians, including those with low incomes and disabilities. See DOJ Press Release.
Under Medi-Cal reimbursement rules, drugs in the so-called “Code 1” category are eligible for government reimbursement only for approved diagnoses, taking into account the drug’s safety, efficacy, misuse potential, and cost. Pharmacies are supposed to serve the gatekeeping function of confirming and certifying Code 1 drugs are dispensed for the approved diagnoses. Pharmacies may seek reimbursement for drugs prescribed outside the approved diagnoses only with a request to Medi-Cal which includes a justification for the non‑approved use.
According to the government, 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 were originated in two whistleblower lawsuits filed under the qui tam provisions of the False Claims Act by a former Walgreens pharmacist and a former pharmacy technician. The whistleblowers will collectively receive roughly $2.3 million from the proceeds of the government’s recovery.