Walgreen settles Medicaid case for $9.9 million

The U.S. Department of Justice said Monday that drugstore operator Walgreen Co. paid $9.9 million to settle whistleblower allegations that it overcharged the Medicaid programs in Minnesota, Michigan, Florida and Massachusetts.

In those four states, Deerfield, Ill.-based Walgreen is limited to billing Medicaid for the copay amount when the beneficiary also holds private insurance. In some cases, Walgreen billed more than that amount, the Justice Department said.

Walgreen did not immediately return calls seeking comment. The Department of Justice did not say in its statement whether Walgreen acknowledged any wrongdoing in the settlement. The extent of the alleged overcharging was also unknown.

"In a False Claims Act case, the government can collect up to three times the amount of the fraud," said department spokesman Charles Miller, implying a maximum overcharge of about $3.3 million.

The payments were made to the four states and to the U.S. Walgreen pharmacists Daniel Bieurance and Neil Thompson, who reported the overcharging, will divide approximately $1.4 million of the award.

Walgreen shares declined in afternoon trading after a financial sector bailout bill was defeated in the House of Representative, which sent stocks sharply lower. Walgreen also reported disappointing fiscal fourth-quarter results before Monday's trading began.

The stock shed $1.77, or 5.3 percent, to $30.96, and reached a low of $30.26. They last traded at that price on Sept. 30, 2003.

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