For Immediate Release
Media Contact: Bob Cooper
(208) 334-4112

Date: June 4, 2008

Wasden Recovers $22,000 from Walgreens in Medicaid Billing Settlement

(Boise) - Walgreen Co. has agreed to pay $22,246 to the Idaho Medicaid Program to settle allegations of improper billing, Attorney General Lawrence Wasden said today. The payment resolves claims that Walgreens violated state and federal law by switching dosage forms of three medications commonly prescribed for Medicaid patients. As a result, Medicaid programs nationwide paid substantially more for these drugs than they otherwise would have.

The payment to Idaho is part of a $35 million settlement with the United States, 42 states and the Commonwealth of Puerto Rico,

“State Medicaid programs provide vital health care services to low income residents of Idaho and other states,” Attorney General Wasden said. “Improper billing and similar practices add cost for the taxpayers with no benefit to Medicaid recipients. The Idaho Legislature created the Medicaid Fraud Control Unit to protect taxpayers by enforcing the laws related to Medicaid payments.”

Today’s settlement is the result of a joint federal-state investigation arising from a lawsuit filed in U.S. District Court in Chicago in 2003. The whistleblower’s complaint in that suit alleged that Walgreens filled prescriptions for Medicaid recipients by aggressively switching dosage forms of ranitidine (the generic form of Zantac, a commonly prescribed anti-ulcer medication); fluoxetine (the generic form of Prozac, an anti-depressant); and selegiline (the generic form of Eldepryl, used in the treatment of Parkinson’s disease and senile dementia).

Government investigators contend that these improper switching practices continued from July 2001 through 2005, and that the wholesale substitution of alternate dosage forms of these drugs resulted in higher payments under the automated Medicaid reimbursement system, with no corresponding medical benefit to the individuals receiving the prescriptions. The settlement also resolves allegations that Walgreens made these wholesale switches without physician involvement and, therefore, violated numerous state regulations governing pharmaceutical dispensing.

In addition to the cash settlements, Walgreens agreed that it will not switch dosage forms of medications if the result would increase the costs to third-party payers, including Medicaid. Pursuant to the agreement, the company’s billing practices will be subject to ongoing federal scrutiny.

The money from the settlements will be deposited into the state’s General Fund for appropriation by the Legislature.

To report Medicaid provider fraud, contact the Idaho Medicaid Fraud Control Unit at (208) 334–4100 or mfcu@ag.idaho.gov.

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