Walgreens pays $9.8M to resolve false claims allegations

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Deerfield, Ill.-based Walgreens has paid the federal government $9.86 million to resolve allegations that it violated the False Claims Act by knowingly submitting improper claims to California's Medicaid program, according to the Department of Justice

Medi-Cal, California's Medicaid program, uses a formulary list commonly know as "Code 1" drugs. Medi-Cal will reimburse for certain Code 1 drugs only for approved diagnoses, and pharmacies serve as gatekeepers to ensure these drugs are dispensed only for approved diagnoses. Pharmacies are allowed to bill Medi-Cal for drugs prescribed outside of the approved diagnoses, but they must submit a justification for the nonapproved use to the California Department of Health Care Services, according to the DOJ.

The settlement resolves allegations that Walgreens failed to properly confirm and document the requisite diagnoses for Code 1 drugs. In some instances, Walgreens dispensed drugs for nonapproved diagnoses without submitting justification to DCHS and then billed Medi-Cal for the prescriptions, according to the DOJ.

The allegations against Walgreens were originally brought in two lawsuits filed under the qui tam, or whistle-blower, provision of the False Claims Act.

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