Consumer Fraud

Walmart settles whistleblower lawsuit alleging Medicaid fraud

whistleblower 2 370x210 Walmart settles whistleblower lawsuit alleging Medicaid fraudRetail giant Walmart has agreed to pay $1.65 million to resolve a whistleblower lawsuit alleging it knowingly submitted claims for reimbursement to California’s Medicaid program that were not supported by applicable diagnosis and documentation requirements.

A pharmacist who has worked at Walmart locations in the greater Sacramento area filed the original lawsuit under the whistleblower provisions of the False Claims Act. According to the Eastern District of California’s U.S. Attorney, Phillip A. Talbert, the whistleblower alleged that Walmart pharmacies failed to perform critical gatekeeping functions ensuring that certain drugs were dispensed for approved diagnoses.

“Walmart 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,” U.S. Attorney Talbert said in a settlement announcement. Medi-Cal rules mandate that pharmacies may only bill for drugs prescribed outside of the approved diagnoses if they submit a request to the California Department of Health Care Services (DHCS) that includes a justification for the non‑approved use.

“These Medi-Cal regulations are essential to protect both patients and limited heath care funding,” said U.S. Attorney Talbert. “My office will continue to hold pharmacies accountable when they fail to comply with regulations like these.”

Headquartered in Bentonville, Arkansas, Walmart operates more than 290 stores in California, all but seven of which have pharmacies. The Medi-Cal program is administered by the DHCS and relies on both federal and state funding to provide health care to millions of Californians, including those with low incomes and disabilities.

According to U.S. Attorney Talbert, the whistleblower who filed the lawsuit on behalf of the U.S. government and the State of California will receive a whistleblower award of $264,000 – about 16 percent of the total recovery.