Indiana A.G. Settles Medicaid Claim With Walgreens Over Gift Cards

INDIANAPOLIS (Legal Newsline) – Indiana Attorney General Greg Zoeller announced two settlements on Friday worth $320,000 to his state with Walgreen Co. resolving allegations of ineligible Medicaid claims and other reimbursement matters.

The settlements with Walgreen Co. resolve lawsuits filed by private whistleblowers under state or federal False Claims Acts on behalf of the government. The lawsuits alleged that the company filed claims that were ineligible for reimbursement from the Medicaid program.

“Whistleblower lawsuits are an effective tool that the attorney general’s office uses to deter fraud on Medicaid and claw back public funds wrongly paid out,” Zoeller said. “Private individuals with insider knowledge who file whistleblower lawsuits to stop fraud against government contracts perform a valuable service, and they become eligible for a percentage of any financial recovery.”

In a settlement of whistleblower lawsuits that originated in Michigan and California, Walgreen Co. agreed to pay $7.9 million in damages to the states and the federal government. Between January 2005 and June 2010, Walgreen allegedly offered $20 to $25 checks and gift cards to Medicare, Medicaid or other healthcare program recipients to induce them to transfer their prescriptions to Walgreen pharmacies. 

State and federal laws prohibit such inducements to buy services and goods provided under Medicaid. The lawsuits alleged that resulting prescription claims submitted for reimbursement to Medicaid would be deemed ineligible.

Under the terms of the gift card and check-related settlement, Indiana Medicaid will receive $22,382.90. The whistleblowers who filed the lawsuit and brought the alleged scheme to light will get 19 percent of the overall settlement, which amounts to $3,901.65 of Indiana’s portion.