Walmart to pay $1.65 million over fraudulent prescription billing claims in whistleblower lawsuit

by John Chapman

Walmart has agreed to pay $1.65 million to settle allegations of violations of the False Claims Act committed by the company. Walmart was accused by federal investigators of knowingly submitting claims for reimbursement under California’s Medi-Cal program that were not supported by diagnosis and documentation requirements called for by the law.

The allegations against Walmart were first made in a qui tam lawsuit filed against the company by a pharmacist who worked in a Sacramento, California Walmart branch. Under a provisions of the False Claims Act, whistleblowers can file civil lawsuits to report fraudulent actions against the federal government and receive a portion of the recovery. The whistleblower who filed the lawsuit against Walmart will receive about $264,000 of the $1.65 million in total damages.

The lawsuit against Walmart involved drugs which are classified as “Code 1” drugs under the Medi-Cal program. “Code 1” drugs are eligible for reimbursement under Medi-Cal only for certain approved diagnoses because of the safety, efficacy, misuse potential, and costs associated with these drugs.

Under Medi-Cal, pharmacies are required to confirm that Code 1 drugs are being dispensed to patients only for approved diagnoses. Pharmacies can only submit these drugs to Medi-Cal for non-approved diagnoses by submitting a request to the California Department of Health Care Services (DHCS) stating a justification for the non-approved use.

According to the whistleblower lawsuits filed against Walmart, the company’s California pharmacies routinely failed to confirm and document diagnoses required by Medi-Cal. In many cases, Walmart knowingly dispensed Code 1 drugs to patients for non-approved diagnoses, then submitted these prescriptions to Medi-Cal for billing.

After the whistleblower lawsuit against Walmart was filed by the Sacramento pharmacist, the allegations of false billing against the company were investigated jointly by several state and federal agencies. The joint investigation was handled by the United States Attorney’s Office for the Eastern District of California, the California Bureau of Medicaid Fraud and Elder Abuse, Department of Health and Human Services, the Office of Inspector General, and the Federal Bureau of Investigation.

Whistleblowers May Qualify to File a Qui Tam Lawsuit Under the False Claims Act

Individuals who have witnessed fraud against the government may be eligible to file a “qui tam” or whistleblower lawsuit under the False Claims Act against the corporations or individuals who were responsible. Billions have been recovered as a result of False Claims Act lawsuits filed by whistleblowers, and hundreds of millions have been paid to the private citizens whose actions made those recoveries possible.

Anyone who has information that a business or person has knowingly submitted a fraudulent claim to any branch of the government can file a lawsuit under the False Claims Act. The whistleblower in these cases does not have to have been personally harmed; they just need to be aware that false or fraudulent conduct has occurred. If money is recovered from a settlement or from a court judgment, the whistleblower who helped initiate the lawsuit can recover up to 30% of the total amount.

The law firm of Heygood, Orr & Pearson has experience handling whistleblower claims. For example, our lawyers successfully negotiated a $1.75 million award for a whistleblower in a large tax fraud case. Our attorneys have the knowledge and experience to ensure that whistleblowers receive the highest possible compensation for pursuing fraud allegations involving government agencies.

For more information about filing a qui tam lawsuit involving whistleblower allegations, contact the lawyers at Heygood, Orr & Pearson for a free legal consultation. You can reach us by calling our toll-free hotline at 1-877-446-9001, or by following this link to our free legal consultation form and answering a few simple questions to get started.

by John Chapman

John Chapman is a licensed attorney with experience in complex commercial litigation (including securities fraud, RICO, shareholder oppression, and derivative actions) and personal injury litigation.