By Jonathan Stempel
(Reuters) -Walgreens Boots Alliance agreed to pay $106.8 million to settle charges that it fraudulently billed the U.S. government for prescriptions that were never dispensed, the Justice Department said on Friday.
The Justice Department said that between 2009 and 2020, Walgreens violated the federal False Claims Act by submitting payment claims to Medicare, Medicaid and other health care programs for prescriptions it processed but were never collected.
This caused the pharmacy chain to receive tens of millions of dollars for prescriptions it never provided to patients, the department said.
“Federal health care programs provide essential health care services to millions of Americans,” said Brian Boynton, chief of the Justice Department’s Civil Division. “We will hold accountable those who abuse these programs by knowingly charging for goods or services they did not provide.”
Walgreens, based in Deerfield, Illinois, admitted no liability in agreeing to a settlement.
“As a result of a software error, we accidentally billed some government health care programs for a relatively small number of prescriptions that our patients submitted but never picked up,” Walgreens said in a statement.
“We have corrected the error, reported the problem to the government and voluntarily refunded any overpayments.”
Friday’s settlement resolves three whistleblower lawsuits filed in Florida, New Mexico and Texas.
The Justice Department said the payout took into account Walgreens’ cooperation and its “significant” steps to upgrade its internal pharmacy management system to ensure the billing problems do not reoccur.
Walgreens previously reimbursed $66.3 million for the settled claims and will be credited for this amount.
The chain recently operated about 8,600 stores in the United States, but said in June that it plans to close a significant number of underperforming stores in the coming years.
Steven Turck, a former Walgreens pharmacy manager who filed the Texas case, will receive $14.92 million from the settlement. Andrew Bustos, a former Walgreens district pharmacy supervisor who filed the case in New Mexico, will receive $1.62 million.
Walgreens Boots (NASDAQ:) shares closed 37 cents higher, or 4.2%, at $9.21 on Friday.
