Healthcare Compliance Alert – Fraud Allegations:
The Compliance Officer should audit contracts with pharmaceutical providers to ensure that a state’s provisions regarding automatic refills are being followed to prevent wasted or unnecessary prescriptions.
A United States Attorney and a Minnesota Attorney General announced recently that Wal-Mart Stores, Inc. and Sam’s West, Inc. (d/b/a Sam’s Club) have agreed to pay a total of $825,000 to resolve fraud allegations that they violated the False Claims Act and Minnesota False Claims Act by submitting claims for payment to Minnesota’s Medicaid program in violation of rules prohibiting Medicaid prescriptions from being automatically refilled.
Minnesota’s Medicaid program, called Medical Assistance, is jointly funded by the federal government and State of Minnesota to provide health care to low-income Minnesotans. Along with at least 20 other states, Minnesota does not allow pharmacies to automatically refill prescriptions paid for by Medical Assistance without an explicit request from the beneficiary for each refill. This policy provides an important control against wasted or unnecessary prescriptions that are reimbursed by taxpayer funds.
According to the allegations in the amended complaint, Walmart and Sam’s Club pharmacies routinely enrolled Medical Assistance beneficiaries in the companies’ auto-refill program and billed Medical Assistance for prescriptions in violation of state rules and regulations. Also, pharmacy employees reported the violation to company managers, yet Walmart and Sam’s Club continued to automatically refill Medical Assistance prescriptions.
Walmart and Sam’s Club will pay $412,500 to the federal government and $412,500 to the State of Minnesota to settle the claims.
In these civil settlements, Walmart and Sam’s Club have denied the allegations of wrongdoing and False Claims Act liability.
This settlement resolves allegations filed in a civil lawsuit originally brought by a whistleblower under the qui tam provisions of the federal False Claims Act and Minnesota False Claims Act, which allow private parties to sue on behalf of the government for false claims and to share in any recovery.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
