Federal and Virginia prosecutors failed to sufficiently allege that a former Walgreen employee’s false records led to payments for medically unnecessary prescriptions, James P. Jones of the U.S. District Court for the Western District of Virginia said in a Dec. 3 opinion.
The “employee’s dishonesty and misconduct are regrettable,” but the complaint’s allegations show Walgreens received payment for medications that had been properly prescribed to Virginia Medicaid enrollees, who received the medication, and for which Walgreens was entitled to be reimbursed under the federal statute governing Medicaid funds, the court said.
The complaint didn’t plausibly allege that the falsified documents were material to government payment decisions, the court said.
The court also said the complaint didn’t raise a valid reverse false claims count because no overpayment to Walgreens occurred. The failure to timely repay funds didn’t give rise to any obligation, the court said.
The complaint filed in June said that Walgreens, acting through Kingsport, Tenn., store manager and pharmacist Amber Reilly, knowingly presented or caused to be presented materially false information to the Virginia Department of Medical Assistance Services.
Reilly’s records alteration scheme caused Virginia Medicaid to improperly approve authorization requests worth at least $793,909 that Walgreens didn’t return, the complaint said.
Reilly pleaded guilty to one count of healthcare fraud contained in a federal information in October 2016, and was sentenced to 16 months in prison in June 2017.
Gibson, Dunn & Crutcher LLP represented Walgreen.
The case is United States v. Walgreen Co., W.D. Va., No. 21-cv-32, 12/3/21.