Consumer Fraud

Walmart Pays $825,000 to Settle Whistleblower’s Medicaid Allegations

prescription flickr 280x210 Walmart Pays $825,000 to Settle Whistleblower’s Medicaid AllegationsWalmart Stores and Sam’s Club have agreed to pay the U.S. and Minnesota $825,000 to resolve allegations that they violated the federal and state False Claims Acts for violating Medicaid rules for automatic prescription refills.

U.S. Attorney Gregory Brooker and Minnesota Attorney General Lori Swanson jointly announced the settlement, which they said stemmed from a lawsuit filed by a whistleblower under the False Claims Act.

Minnesota is one of about 20 states that does not allow Medicaid beneficiaries to have their prescription drugs automatically refilled. Instead, the state’s Medicaid program, called Medical Assistance, requires beneficiaries to request refills.

The state’s announcement says this rule provides “an important control against wasted or unnecessary prescriptions that are reimbursed by taxpayer funds.”

According to the whistleblower complaint, pharmacies in Walmart and Sam’s Club locations in Minnesota routinely enrolled Medical Assistance beneficiaries in the companies’ auto-refill program, then billed the Medicaid program for prescriptions in violation of state rules and regulations.

The whistleblower complaint also alleged that employees of the Walmart and Sam’s Club pharmacies reported the violation to company managers, yet the company continued to automatically refill prescriptions to Medical Assistance beneficiaries.

The settlement agreement requires Walmart to pay $412,500 to the federal government and $412,500 to the state of Minnesota.

The U.S. and Minnesota will in turn each pay the whistleblower $78,375 as an award for bringing the false claims to light. Walmart will also pay the whistleblower an additional $110,000 to cover expenses, attorney fees, and other costs incurred in bringing the civil action, according to the Minneapolis Star Tribune.

“Businesses that participate in federally and state funded health care programs have a responsibility to ensure compliance with the rules, specifically rules that are in place to avoid unused prescription medications and wasted taxpayer funds,” U.S. Attorney Brooker said.