Walmart and Sam’s Club Pay $825,000 to Settle Allegations of False Claims Act Violations
Walmart and its Sam’s Club division have agreed to settle allegations that they violated the federal False Claims Act (FCA) and Minnesota False Claims Act (MFCA). A whistleblower alleged the company was billing the Minnesota Medicaid program after automatically refilling prescriptions, violating state rules and regulations prohibiting Medicaid prescriptions from being automatically refilled. The whistleblower lawsuit was filed under the qui tam provisions of the federal False Claims Act and Minnesota False Claims Act.
The whistleblower accused the company’s pharmacies of routinely enrolling Medical Assistance beneficiaries in the companies’ auto-refill program. Walmart and Sam’s Club have agreed to pay the government $825,000 to resolve these allegations.
U.S. Attorney Gregory Brooker’s office issued a release on Tuesday, May 29, announcing the settlement in which the company will pay $412,500 to the federal government and $412,500 to the State of Minnesota. “Minnesota does not allow pharmacies to automatically refill prescriptions paid for by Medical Assistance (Minnesota’s Medicaid program) without an explicit request from the beneficiary for each fill,” the release stated.
In the release, Brooker said “Businesses that participate in federally and state funded healthcare programs have a responsibility to ensure compliance with the rules, specifically rules that are in place to avoid unused prescription medications and wasted taxpayer funds.”
The qui tam provisions of the False Claims Act allow persons and entities with evidence of fraud against federal programs or contracts to sue the wrongdoer on behalf of the United States government and to receive a share of any recovery.
According to the settlement agreement, the qui tam whistleblower will receive $156,750 and Walmart also agreed to pay $110,000 for the whistleblower’s expenses, attorney fees and costs associated with the civil action.
“The False Claims Act is America’s number one law for preventing fraud against the taxpayer,” said whistleblower attorney Stephen M. Kohn, “This is another example of the DOJ doing its job in protecting the rights of the American people.”
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