Office of the Attorney General News Release Archive

Wednesday, October 13, 1999


Pharmacy chain ordered to pay 25 states for overbilling; Texas to receive $700,000

AUSTIN - Texas Attorney General John Cornyn today announced a $7.6 million settlement with Walgreen Company. The Illinois based pharmacy chain has agreed to pay 25 state Medicaid programs and Puerto Rico, to settle allegations that the company submitted false claims to federal and state health care programs. Texas' Medicaid Program will recover just over $700,000.

"Our efforts in fighting medicaid fraud are beginning to pay off. If you abuse the system and overbill the State, we will find you and make you pay," Cornyn said. "I commend all those involved in this effort. We look forward to continuing the relationship with the state and federal agencies involved," Cornyn added.

The Attorney General's Medicaid Fraud Control Unit worked in conjunction with the National Association of Medicaid Fraud Control Units. Walgreen agreed to settle charges that it billed federal and state health care programs for quantities of medication that exceeded amounts actually given to customers. The federal government alleged that Walgreen dispensed partial or "short" prescriptions, due to insufficient stock, but billed the government health care programs for the full quantities of the medication prescribed. The $7.6 million settlement covers the time period of June 1, 1986 to September 1, 1996.

The terms of the Walgreen settlement include a Corporate Integrity Agreement that will be administered by the Office of Inspector General of the U.S. Department of Health and Human Services. Walgreen has agreed to modify its pharmacy billing operations to ensure future compliance with applicable laws and Medicare and Medicaid rules and regulations. The Corporate Integrity Agreement requires Walgreen to monitor these practices for problems and establishes sanctions for violations.

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Contact Ted Delisi, Heather Browne, or Tom Kelley at (512) 463-2050