Medi-Cal Fraudulent Billing Leads to Whistleblowers and Walgreens $9.9 Million False Claims Act Settlement

Our Los Angeles based Whistleblower Attorneys report another multi-million dollar Medi-Cal False Claims Act (“FCA”) settlement.  The claims were brought to light by a pharmacist and technician at a Walgreens pharmacy.  The two alleged that the drugstore pharmacy chain which operates over 600 stores throughout California was submitting claims for Medi-Cal reimbursement without first confirming that medical necessity of the drugs, a Medi-Cal requirement.  The case included both the federal FCA and California FCA.

According to Medi-Cal regulations, pharmacies are required to submit certain documentation before dispensing certain drugs.  Although much of the funding is provided by the federal government, Medi-Cal is regulated by the California Department of Health Care Service and supports those with low income or disabilities.  Here, Walgreens pharmacies did not submit the required justification when certain drugs were dispensed to non-approved uses.  This, combined with the unruly pressures that are placed on pharmacists and technicians to fill prescriptions in sometimes way too fast fashion, led to cutting corners and finding ways to trick the computer systems to get paid by Medi-Cal.  As a result, the two whistleblowers will get around 20% of the $10 million settlement.

Under the FCA, a judge or jury is entitled to order the defendant to pay triple the actual damages that the jury finds.  In addition, the FCA also permits statutory penalties from $5,500 to $11,000 for each false claim submitted by the defendant.  As result, a whistleblower may receive approximately 15 to 25 percent of the total FCA recovery plus attorney’s fees.

As the main enforcement arm of the federal government, the Justice Department reviews all cases filed under the FCA.   Then, once the whistleblower case is assessed, the government decides whether it will prosecute or allow the whistleblower to bring the complaint on the government’s behalf.

The FCA is used to stem out fraud related to billing, staffing, and kickbacks. Examples of these are when financial companies are supposed to abide by state and federal laws and chose to ignore them.  They also bills for services that were not provided or the bill was submitted at an improperly higher rate of reimbursement for the services.  In addition, financial companies are often fount to illegally bill the government for substandard services by fraudulently certifying otherwise. Alternatively, these companies may realize that they have credit from their services that they have to repay to the government, but the companies do not reimburse the government within the 60 day time frame.  See these blogs for more examples of the FCA.

If you witness any potential false claims in California (i.e. requests for reimbursement to the government, not actually rendering work when reimbursement is received, or receiving and knowingly retaining an overpayment) by your company, or you are retaliated against for voicing your concern about potential wrongdoing, immediate action is vital.  Contact the experienced employment law attorneys at Stephen Danz & Associates for a free consultation to discuss your circumstances and legal options.