Litigation Advances in Parallel False Claims Act Cases Against Walgreens

Walgreens Pharmacy has been in business for over 100 years, but its century-long business presence cannot insulate it from the onslaught of False Claims Act allegations raised by several California pharmacists alleging serious violations of state fraud laws.

In today’s post, we look at two recent milestones in the ongoing False Claims Act litigation against the pharmacy chain, including contentions of illegal coding practices, as well as misconduct involving the marketing of gift cards toward customers receiving Medi-Cal and Medicare benefits for prescription drug coverage.

The cases were filed by former pharmacists under the False Claims Act’s qui tam provisions, which allow private citizens the opportunity to pursue a civil action on behalf of taxpayers in order to recoup funds wrongfully siphoned via intentional fraud. For their efforts, False Claims Act plaintiffs often receive up to 30 percent of the verdict or settlement.

Plaintiff Files False Claims Act Lawsuit Against Sacramento Walgreens – Case 1

In the first pending False Claims Act lawsuit against Walgreens, a former pharmacist – having worked for the chain from 2008 through 2013 – claims to have witnessed fraud firsthand at more than 12 Sacramento-area locations. Allegedly, several other pharmacists were routinely implementing a Medicare or Medi-Cal “override” for customers, and then subsequently entering a generic billing code in order to justify the override.

An override is a procedure through which a pharmacy can qualify a customer for coverage in the event the patient’s claim is denied – for example, if a patient needs a refill prior to the predetermined date. However, all overrides must be supported by proper justification. Allegedly, the 12 Sacramento stores named in the lawsuit were engaging in unjustified overrides for purposes of overbilling government healthcare providers, all at the expense of taxpayers.

Plaintiff Revives False Claims Act Lawsuit With Amended Complaint – Case 2

In a second case against Walgreens, also pending in one of California’s district courts, a former Walgreens pharmacist was given a second chance after U.S. District Judge Beverly Reid O’Connell accepted his amended complaint after dismissing the plaintiff’s claim in December 2014 for lack of evidence to support a claim of intentional fraud. In this case, the plaintiff has alleged that Walgreens intentionally overstocked its shelves to the tune of $98,000 in excess inventory, all of which was billed to Medi-Cal and Medicare despite having never been actually dispensed to customers.

In the pharmacist’s first complaint, the judge concluded that he did not include enough threshold information to support a claim that Walgreens intended to commit fraud, and the allegations tended to support a claim of negligence or accidental oversight. However, his second complaint contained evidence of an envelope containing handwritten notes by a pharmacy employee explaining that the government had already been charged for medication that was never picked up.

The judge concluded that the evidence tended to show an intent to defraud, knowledge of the fraud, or “[a]t the very least, the failure to inquire any further into the matter demonstrates reckless disregard.”

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Do you need a Whistleblower Lawyer or want to know more information about Qui Tam Law and your rights under the False Claims Act?

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