Walgreens Settles Medicaid Issue

Attorney General Richard Blumenthal, Chief State’s Attorney Kevin T. Kane, and Department of Social Services Commissioner Michael P. Starkowski recently announced that Connecticut will receive $126,488 as part of a nationwide agreement settling allegations that Walgreens illegally changed the dosage forms of three drugs to overcharge the state Medicaid program.

A total of 42 states and the Commonwealth of Puerto Rico participated in the $35 million settlement. The agreement results from a federal-state investigation sparked by a false claims act lawsuit filed in 2003 in US District Court in Chicago.

According to Mr Blumenthal, “This settlement returns more than $126,000 to taxpayers, money that Walgreens stole by duplicitously and deviously switching to more expensive dosage forms. These switches served no purpose but to illegally extract extra dollars from the state.

“This scheme was shameful and shameless, swapping pills and capsules to overcharge taxpayers,” he continued. “I will continue to vigorously and aggressively pursue companies and individuals who defraud the state’s health programs.”

Mr Kane commended the Medicaid Fraud Control Unit in the Office of the Chief State’s Attorney, the Attorney General’s Office and the Department of Social Services for their continuing cooperation to combat fraud and abuse in the Medicaid program to prevent the loss or waste of limited public resources.

Commissioner Starkowski said, “The settlement again illustrates the need for the federal and state governments to be constantly vigilant in fraud detection and interdiction activities, especially since Medicaid is by far the largest single program account in the state budget.”

Walgreens allegedly switched dosage forms of Ranitidine (the generic form of Zantac, a commonly prescribed anti-ulcer medication); Fluoxetine (the generic form of Prozac, an antidepressant); and Selegiline (the generic form of Eldepryl, used in the treatment of Parkinson’s disease and senile dementia).

Specifically, the pharmacy changed Ranitidine (generic Zantac) from 150 mg or 300 mg tablets to capsules; Fluoxetine (generic Prozac) from 10 mg or 20 mg capsules to tablets, and Selegiline (generic Eldepryl) from 5 mg tablets to capsules. The switches allegedly occurred from July 2001 through 2005.

The changes, unauthorized by any physician and of no benefit to patients, violated federal and state statutes and regulations, but allowed Walgreens to increase charges to state Medicaid programs.

In addition to cash settlements to state and federal governments, Walgreens signed a Corporate Integrity Agreement with the Office of the Inspector General of the United States Department of Health and Human Services.

Under the agreement, Walgreens agreed to not switch dosage forms if the result increases costs to third party payers, including Medicaid, and consented to federal monitoring of its billing practices.

Under the settlement, the federal government also will receive $118,801 for its share of Connecticut’s Medicaid costs. The state and federal governments split the cost of Medicaid, which provides medical care to the indigent.