Retail pharmacy chain Walgreens agreed to pay $7 million to settle alleged violations of the False Claims Act (FCA) that it overbilled the state of Tennessee’s Medicaid insurance program for Hepatitis C medications and kept the proceeds even after it discovered an employee’s misconduct.
Before 2019, TennCare, the state’s Medicaid program, required prior authorization based on eligibility criteria for coverage of certain Hepatitis C direct-acting antiviral medications.
From 2014-16, a former pharmacist and store manager of a Walgreens in Kingsport, Tenn., falsified prior authorization requests for 65 TennCare patients so they could receive coverage for their Hepatitis C medications, the Department of Justice (DOJ) said Friday in a press release. The pharmacy chain retained the proceeds from the improper claims even after the scheme came to light, the DOJ said.
“The False Claims Act prohibits a pharmacy from knowingly submitting claims for payment for medications dispensed to patients who do not meet Medicaid coverage and payment requirements and from knowingly retaining payments that were improperly made in violation of such requirements,” the DOJ said.
The United States and state of Tennessee filed a lawsuit in May 2021 in U.S. District Court for the Eastern District of Tennessee, laying out the allegations. As part of the settlement, the parties agreed the lawsuit should be dismissed. Walgreens did not admit liability for the allegations, the DOJ said.
Walgreens declined to comment.
Walgreens has reached multiple other settlements regarding alleged violations of the FCA in recent years, including a pair of agreements totaling $269.2 million in the Southern District of New York in 2019 to resolve the company’s admitted overbilling of Medicaid and other federal health programs for insulin pens and through discount programs.