By: Christopher A. Parrella, Esq., CPC, CHC, CPCO Parrella Health Law, Boston, Ma. A Health Law Defense and Compliance Firm

In a significant development, Walgreens Boots Alliance Inc. and Walgreen Co. (Walgreens) have agreed to a $106.8 million settlement to resolve allegations that they violated the False Claims Act (FCA) by submitting false claims to government health care programs, including Medicare and Medicaid, for prescriptions that were never dispensed. This case highlights the critical need for transparency and accountability in pharmacy practices, particularly when it comes to billing practices under federal health care programs.

The Allegations

The settlement stems from claims that, between 2009 and 2020, Walgreens processed prescriptions that were never picked up by patients, yet still billed Medicare, Medicaid, and other federal health care programs. This alleged conduct resulted in millions of dollars in fraudulent payments, with Walgreens receiving payments for services and goods it never actually provided.

The government’s investigation was prompted by whistleblower lawsuits filed under the FCA, which allows private citizens to file lawsuits on behalf of the government and share in the recovery. Two former Walgreens employees, Steven Turck and Andrew Bustos, played a key role in exposing the fraudulent billing practices, and they will collectively receive over $16 million as part of the settlement.

Walgreens’ Response and Remediation

Walgreens received credit under the DOJ’s guidelines for cooperating with the investigation and taking proactive steps to remedy the situation. The company implemented enhancements to its electronic pharmacy management systems to prevent future occurrences of this kind of misconduct. Additionally, Walgreens refunded over $66 million to the government as part of its resolution with federal authorities.

While Walgreens did not admit liability in the settlement, the company’s cooperation and internal reforms demonstrate a commitment to addressing the issues brought forth by the government.

What This Means for Pharmacies and Health Care Providers

This case serves as a stark reminder that pharmacies and other health care providers must remain vigilant in their billing practices, ensuring they are compliant with federal regulations. Pharmacies found in violation of the FCA not only face severe financial penalties but also risk damaging their reputations and relationships with federal payers.

At Parrella Health Law, we are dedicated to assisting pharmacies and health care providers navigate complex compliance issues, ensuring that your practices align with federal and state regulations. With increasing scrutiny on billing practices, now is the time to assess and strengthen your compliance programs. For guidance and support, contact us at 857-328-0382 or email Chris directly at cparrella@parrellahealthlaw.com. We’re here to help safeguard your organization from the risks of non-compliance.