MEDICAID FRAUD: DRUGSTORE CHAINS SCRUTINIZED
State and federal officials are investigating "allegationsThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
that pharmacies nationwide may have billed Medicaid for
undelivered prescriptions worth an estimated $26 million a year,"
Scripps Howard/Arizona Republic reports. The fraud allegations
originated in several "whistle-blower lawsuits" filed against two
of the nation's largest drugstore chains, Eckerd and Walgreen.
Louis Mueller, a pharmacist employed by Eckerd in Florida, filed
suits in California, Florida, Illinois and Tennessee -- "the only
states that allow individuals to recover money for reporting
false claims filed against the government" --alleging that
drugstore chains regularly billed Medicaid for prescriptions that
were not completely filled. Mark Schlein, the director of the
Florida attorney general's Medicaid fraud office, emphasized that
the investigation prompted by the lawsuits is an "industrywide
issue" involving more than Eckerd and Walgreen. Eckerd officials
declined to comment on the issue, but a Walgreen spokesperson
said the company "denies the charges and is prepared to defend
itself in court."
THE ALLEGED PROCESS
In the Illinois suit, which has been unsealed, Mueller said
that pharmacists working for Walgreen "commonly don't have enough
pills to fill prescriptions because of lean inventories." As a
result, pharmacists partially fill a prescription and ask
patients to return later for the remainder. Many patients never
return, "so in thousands of cases Medicaid is billed for the full
prescription while only a partial prescription is dispensed,"
Mueller charged in the suit. Illinois officials joined Mueller
in the suit, estimating that the state paid for 232,000 so-called
"short" prescriptions in 1995, "costing the state and federal
government ... more than half a million dollars in overcharges."
The suit says the pharmacies' practices amount to "false claims
against the government," and states that Walgreen could be fined
as much as $2.3 billion for the 1995 claims alone. If all chain
drugstores "short" prescriptions at the same rate as the Illinois
suit charges, Scripps Howard/Arizona Republic notes that "the
annual losses to Medicaid nationwide could top $26 million a
Mueller is eligible to receive up to 25% of any money
recovered through court action or settlement. Illinois officials
are reportedly in settlement talks with Walgreen, and a
settlement is "under way in Florida with Eckerd." Mueller also
filed a federal suit against the two pharmacy chains. Though
federal officials did not comment on the case, Schlein said a
"'global' resolution is being sought to settle claims against all
pharmacies involved" (O'Connell, 9/6).