Maryland and other states have reached a $209.2 million settlement with the owner of Walgreens drugstores over allegations of a scheme to over-dispense insulin pens to Medicare and Medicaid recipients.
Maryland will receive $266,951 and will split that with the federal government, which joined the states in the settlement with Walgreens Boots Alliance, Maryland Attorney General Brian E. Frosh said Friday.
“Walgreens was engaged in straight up fraud,” Frosh said in an announcement. “It cheated the state and the Marylanders who depend upon Medicaid for health care.”
A Walgreens spokesman said the company cooperated with the Department of Justice and admitted no liability.
“Walgreens is a company of pharmacists living and working in the communities we serve, and we have always taken the safety and reliability of the medicines our patients need very seriously,” said Phil Caruso, a Walgreens spokesman, in an email. “We are resolving these matters because we believe it is in the best interest of our customers, patients and other stakeholders to move forward.”
The states alleged that Walgreens dispensed more insulin than was called for by patients’ insulin pen prescriptions and falsified information on claims submitted for Medicaid reimbursement, including the quantity of insulin and/or days’ supply dispensed. According to the settlement, Walgreens admitted to programming its computer system to define a full box of five insulin pens as the minimum dispensing package size.
That prevented pharmacists from being able to dispense fewer than five pens, even though a patient’s prescription called for less than a box of five, Frosh’s office said. That meant that Walgreens reported information to state Medicaid programs that was different from and lower than the correctly calculated supply, resulting in state Medicaid programs paying for claims that otherwise would not have been approved, Frosh said.
Caruso said Walgreens entered into a corporate integrity agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services that builds on the company’s existing compliance program.
The settlement stemmed from a whistleblower action filed in 2015 in U.S. District Court for the Southern District of New York under the federal False Claims Act. The National Association of Medicaid Fraud Control Units investigated and negotiated the settlement with Walgreens on the states’ behalf.