Senators Demand Answers From Facebook And Google About Project Atlas And Screenwise Meter Programs
Survey: People In Relationships Spy On Cheating Partners. FTC: Singles Looking For Love Are The Biggest Target Of Scammers

Walgreens To Pay About $2 Million To Massachusetts To Settle Multiple Price Abuse Allegations. Other Settlement Payments Exceed $200 Million

Walgreens logo The Office of the Attorney General of the Commonwealth of Massachusetts announced two settlement agreements with Walgreens, a national pharmacy chain. Walgreens has agreed to pay about $2 million to settle multiple allegations of pricing abuses. According to the announcement:

"Under the first settlement, Walgreens will pay $774,486 to resolve allegations that it submitted claims to MassHealth in which it reported prices for certain prescription drugs at levels that were higher than what Walgreens actually charged, resulting in fraudulent overpayments."

"Under the second settlement, Walgreens will pay $1,437,366 to resolve allegations that from January 2006 through December 2017, rather than dispensing the quantity of insulin called for by a patient’s prescription, Walgreens exceeded the prescription amount and falsified information on claims submitted for reimbursement to MassHealth, including the quantity of insulin and/or days’ supply dispensed."

Both settlements arose from whistle-blower activity. MassHealth is the state's healthcare program based upon a state law passed in 2006 to provide health insurance to all Commonwealth residents. The law was amended in 2008 and 2010 to make it consistent with the federal Affordable Care Act.

Massachusetts Attorney General (AG) Maura Healey said:

"Walgreens repeatedly failed to provide MassHealth with accurate information regarding its dispensing and billing practices, resulting in overpayment to the company at taxpayers’ expense... We will continue to investigate cases of fraud and take action to protect the integrity of MassHealth."

In a separate case, Walgreen's will pay $1 million to the state of Arkansas to settle allegations of Medicaid fraud. Last month, the New York State Attorney General announced that New York State, other states, and the federal government reached:

"... an agreement in principle with Walgreens to settle allegations that Walgreens violated the False Claims Act by billing Medicaid at rates higher than its usual and customary (U&C) rates for certain prescription drugs... Walgreens will pay the states and federal government $60 million, all of which is attributable to the states’ Medicaid programs... The national federal and state civil settlement will resolve allegations relating to Walgreens’ discount drug program, known as the Prescription Savings Club (PSC). The investigation revealed that Walgreens submitted claims to the states’ Medicaid programs in which it identified U&C prices for certain prescription drugs sold through the PSC program that were higher than what Walgreens actually charged for those drugs... This is the second false claims act settlement reached with Walgreens today. On January 22, 2019, AG James announced that Walgreens is to pay New York over $6.5 million as part of a $209.2 million settlement with the federal government and other states, resolving allegations that Walgreens knowingly engaged in fraudulent conduct when it dispensed insulin pens..."

States involved in the settlement include New York, California, Illinois, Indiana, Michigan and Ohio. Kudos to all Attorneys General and their staffs for protecting patients against corporate greed.


Feed You can follow this conversation by subscribing to the comment feed for this post.

Chanson de Roland

Well, I am not so quick to give kudos to the state and federal prosecutors. The reported facts demonstrate an intentional and concerted program of fraudulently billing the state and federal governments that appears to make out claims for criminally defrauding those governments. Some natural person or persons at Walgreens committed these apparently criminal frauds, and those natural persons should go to jail for criminal fraud.

Walgreens itself is just so many pieces of paper in some Secretary of State’s office, a collection of inanimate assets, and lower leve employees, who either were incapable of committing these frauds or who knew nothing of them. And so, though it has legal personality, Walgreens should not be held criminally liable, nor would the law require that. And holding Walgreens, the corporation, criminally liable would disqualify Walgreens from participating in Medicaid and Medicare in ways that would not only misplace criminal liability but would harm patients, innocent employees, lessen competition in the already inadequately competitive market for retail pharmacies, and harm community health. So there is no reason for holding Walgreens criminally liable, because Walgreens is not criminally culpable and because doing so would invoke the harms that I described, supra. No judge, therefore, would do that or need to do that.

But some person or, most likely, a group of persons in Walgreens’s senior management have committed serious crimes against the American taxpayers by defrauding their state governments and the federal government. It seems that a skilled prosecutor could make those criminal case by squeezing lower level people with the threat of long prison sentences, unless and until they disclosed, testified against, and offered all the evidence in their possession or control against those in senior management who concocted and ordered these criminal frauds. And justice won’t be done until those members of management are discovered, prosecuted, imprisoned if found guilty, and had their wealth confiscated to pay these settlements, before a penny of Walgreens’ shareholders wealth pays a cent of these settlements.

These are not misdemeanor traffic violations. You just don’t commit serious felonies of fraud for which an ordinary American and doctors are locked up everyday, and escape by paying civil damages with your shareholders’ money and which are probably tax deductible, which means that we the taxpayers, after executives or someone at Walgreens defrauded us, will pay a significant portion of Walgreens’ cost of settlement, when the criminal cases should be well within the capability of skilled state and federal prosecutors.

That a miserably weak deterrent against future similar crimes: Committ a huge fraud against the government, violate your fiduciary duty to Walgreens and its shareholders, get bonuses in your compensation for Walgreens financial performance. But, if you are caught, you won’t be personally prosecuted; you won’t have to personally pay anything; your shareholders and Walgreens pay the settlements and suffer all of the negative consequences, and you apparently keep your job—all because the federal and state governments can’t be bothered with doing their jobs of prosecuting at least serious crime. That is not a deterrent against future similar crimes but is an invitation to attempt them. For what would you have to lose? And there is no excuse for not prosecuting the frauds, even under RICO, because the law would not require a judge to either convict Walgreens, along with its criminal employees, or impair its operations. A smart jurist can separate the criminal culpability of natural persons from those persons’ misuse of a corporate entity. And where the harms of convicting that entity are disastrous and the entity has principally and mostly a legitimate purpose, the law does not require a judge to ruin that entity. Even a RICO conviction would be used for no more than reforming Walgreens management and culture so that in the future it would conduct its operations in a law abiding manner.

Yet federal and state prosecutors have failed to prosecute any of the crimes of Walgreens’ employees’ frauds, and are taking bows for having collected settlements that they easily got and we’re going to get, once the malefactors at Walgreens saw that they could escape any personal penalty by offering their shareholders’ money, keep operating Walgreens’ business without any restraint or impairment, and keep their jobs, as if not much happened. That doesn’t deserve kudos for government officials; that deserves scorn and even discipline for not doing your jobs.

The comments to this entry are closed.