OLYMPIA - Walgreen Co. (“Walgreens”) has agreed to pay $914,753 to the state of Washington to settle allegations of improper billing, Attorney General Rob McKenna announced today.
The payment, part of a $35 million settlement with the federal government, 42 states and the Commonwealth of Puerto Rico, resolves claims that Walgreens violated various state and federal laws by switching dosage forms of three medications commonly prescribed for Medicaid patients, causing Medicaid programs nationwide to pay substantially more for these drugs than they otherwise would have.
“Today’s settlement returns nearly a million taxpayer dollars to where it was intended: the program set up to pay for medical coverage for our citizens,” McKenna said. “This settlement is part of our office’s ongoing effort to ensure that our citizens’ prescriptions are filled exactly the way their doctors wrote them, while our taxpayers are shielded from abuses of our Medicaid system. I applaud the on-going work of our staff.”
Walgreens, which currently operates retail pharmacies in 48 states and Puerto Rico, furnishes pharmacy services to Medicaid recipients in Washington State.
Today’s settlement is the result of a joint federal-state investigation arising from the 2003 filing of a false claims act lawsuit in U.S. District Court in Chicago. A whistleblower alleged that Walgreens filled prescriptions for numerous Medicaid recipients by aggressively switching dosage forms of ranitidine (the generic form of Zantac, a commonly prescribed anti-ulcer medication); fluoxetine (the generic form of Prozac, an anti-depressant); and selegiline (the generic form of Eldepryl, used in the treatment of Parkinson’s disease and senile dementia), and that this conduct violated various federal and state statutes and regulations.
Government investigators contend that these improper switching practices continued from July 2001 through 2005, and that the wholesale substitution of alternate dosage forms of these drugs resulted in higher payments under the automated Medicaid reimbursement system, with no corresponding medical benefit to the individuals receiving the prescriptions. Today’s settlement also resolves allegations that Walgreens made these wholesale switches without physician involvement and therefore violated numerous state regulations governing pharmaceutical dispensing.
This settlement is the third and final in a series resulting from investigations of similar conduct by pharmacy providers nationwide. Together the three cases have returned more than $120 million to Medicaid programs around the country.
In addition to the payment of cash settlements to the state and federal governments, Walgreens has agreed to the terms of a Corporate Integrity Agreement (“CIA”) with the Office of the Inspector General of the United States Department of Health and Human Services. The CIA includes provisions ensuring that Walgreens does not switch dosage forms of medications if the result would increase the costs to third-party payers, including Medicaid, and will subject the company’s billing practices to ongoing federal scrutiny.
The settlement was the result of negotiations jointly conducted by the United States Attorney’s Office for the Northern District of Illinois and the National Association of Medicaid Fraud Control Units.
Dawn Cortez, Director of the Medicaid Fraud Control Unit of the Attorney General’s Office and Investigator Terry Tate handled this case for the State of Washington.
Dan Sytman, AGO Media RelationsManager, (360) 586-7842
Janelle Guthrie, AGO CommunicationsDirector, (360) 586-0725