Health Law Daily Walgreens enters corporate integrity agreement with the OIG
Friday, January 25, 2019

Walgreens enters corporate integrity agreement with the OIG

By Elizabeth M. Dries, J.D.

Walgreens Co. entered into a Corporate Integrity Agreement with the Office of Inspector General, along with two settlement agreements, to resolve allegations that it improperly billed Medicare, Medicaid and other federal health care programs.

Walgreens Co. (Walgreens) entered into a Corporate Integrity Agreement (CIA) with the Office of Inspector General (OIG) to promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid and all other federal health care programs in its retail and its specialty pharmacy operations. Simultaneously with the CIA, Walgreens entered into three related settlement agreements with the United States to address allegations of health care fraud under the false claims act. The CIA is effective until January 2024 (Corporate Integrity Agreement, January 11, 2019).

New York settlement agreement. On January 16, 2019, Walgreens agreed to pay the U.S. and state governments a total of $209.2 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal health care programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them. Walgreens admitted that when a federal health program denied a claim from Walgreens because the reported days of supply for a full carton of five insulin pens exceeded the federal program’s days-of supply limit, it was Walgreen’s practice to dispense and bill for the full carton and reduce the reported days of supply to conform to the program’s days of supply limit. Thus, Walgreens repeatedly reported days of supply data to federal health programs that were different from, and lower than, the days of supply calculated according to the standard pharmacy billing formula.

The second settlement agreement required Walgreens to pay $60 million to resolve allegations that it overbilled Medicaid by failing to disclose to and charge Medicaid the lower drug prices that Walgreens offered the public through a Prescription Savings Club (PSC). Contrary to Medicaid regulations directing Walgreens to seek Medicaid reimbursement only at the lowest drug price points, Medicaid failed to disclose to Medicaid the discount drug prices it offered through PSC when it sought Medicaid reimbursement. Walgreens admitted that: (1) customers enrolled in PSC were eligible to receive discounts for thousands of drugs; and (2) in submitting claims for reimbursement to Medicaid, Walgreens did not identify its PSC program prices as its usual and customary price for the drugs on the PSC program formulary resulting in the States paying more in reimbursement.

Wisconsin settlement agreement. Walgreens agreed to pay $3.5 million to the United States and the State of Wisconsin to settle allegations that Walgreens violated the False Claims Act by submitting claims to Medicaid for stimulant medications without complying with Medicaid rules. From 2011 to 2014, Walgreens violated Wisconsin Medicaid rules by dispensing routine stimulant medications to Wisconsin Medicaid beneficiaries without first verifying that the prescribing physician ordered the medication for medically appropriate treatment. By failing to verify the medications were prescribed appropriately, Walgreens dispensed and billed Wisconsin Medicaid for medically unnecessary medications.

The CIA. In connection with these settlements, Walgreens entered into a CIA. The CIA reaches broadly across Walgreen’s retail and specialty pharmacies that bill federal health care programs requiring broad oversight, multi-site claims reviews to be conducted by and Independent Review Organization (IRO), and other Corporate Integrity requirements. Specifically, the CIA requires the appointment of a Compliance and Ethics Officer, a Compliance Committee, and Board of Directors for the term of the CIA. Within 120 days of the effective date, Walgreens must develop and implement written policies regarding the operation of the compliance program. Within 90 days, Walgreens must also develop a training and education plan, a review procedure engaging an IRO, a risk assessment and internal review process, and a disclosure program. In addition, Walgreens will submit both implementation and annual reports summarizing and updating the requirements of the CIA. Failure to comply with the requirements of the CIA may result in penalties ranging from $1,000 to $50,000. The CIA is effective for five years beginning January 11, 2019.

Companies: Walgreens Co; Walgreens Boots Alliance, Inc.

MainStory: TopStory CorporateIntegrityAgreements CMSNews MedicaidPaymentNews PaymentNews PrescriptionDrugNews

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