As part of the other fraudulent scheme, Walgreens used itsPrescription Savings Program to overcharge federal health careprograms, according to prosecutors. (Photo: Shutterstock)

Walgreens has entered into an agreement with federal prosecutorsin Manhattan to settle Medicaid and Medicare fraud allegations in two separate actionsbrought against the national pharmacy chain, according to courtrecords unsealed by U.S. District Judge Paul Crotty of the SouthernDistrict of New York Tuesday.

The company agreed to pay more than $209 million to resolvedthat it improperly billed federal health care programs for hundredsof thousands of insulin pens provided to Medicare and Medicaidbeneficiaries who did not need the diabetes medication.Additionally, Walgreen's agreed to a $60 million payment foroverbilling Medicaid for medications offered toconsumers through a discount program.

Related: The feds are cracking down on health care fraud.Here's what they're looking for.

“Medicare and Medicaid provide essential healthcare coverage tomillions of people across this country. The financial integrity ofthese programs depends on truthful and accurate billing bypharmacies like Walgreens,” U.S. Attorney Geoffrey Berman said in astatement. “Overbilling and improper billing of Medicare andMedicaid unduly burden taxpayers and put the solvency of thesevital healthcare programs at risk.”

According to federal prosecutors, the insulin fraud occurredthrough two specific Walgreens policies. First, the company'selectronic management system prevented pharmacists from dispensingpartial boxes of insulin pens, even when a patient didn't requirethat much insulin. Second, when the amount distributed exceededwhat was prescribed for a total number of daily doses, Walgreensfalsely stated in reimbursement forms that what was handed outdidn't go over that limit.

As part of the other fraudulent scheme, Walgreens used itsPrescription Savings Program to overcharge federal health careprograms, according to prosecutors. While it was providingcustomers a discount on drugs ordered through the program,Walgreens was failing to tell Medicaid what the prices were when itbilled for reimbursement. This led to Medicaid paying more than itshould have for the discounted medications.

As part of the settlement, New York State will receive a totalof $14.5 million. Both fraud suits arose from two separate federalqui tam whistleblower suits against Walgreens.

In a statement provided by a Walgreens spokesman, the companysaid it was pleased to have the issues resolved. The companyclaimed to have fully cooperated with the government, and to haveadmitted to no wrongdoing. According to federal prosecutors, thecompany “admitted and accepted responsibility for conduct theGovernment alleged in its complaints under the False ClaimsAct.”

“Walgreens is a company of pharmacists living and working in thecommunities we serve, and we have always taken the safety andreliability of the medicines our patients need very seriously. Weare resolving these matters because we believe it is in the bestinterest of our customers, patients and other stakeholders to moveforward,” the company statement read.

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