By Kate BumgardnerPublished Mar 03, 2018 10:50:25The pharmacy that ran into trouble when it was sued by the federal government to pay $1.9 billion to cover claims for a botched drug shortage is facing an even bigger headache.
Walgreens Corp. said Thursday it has agreed to pay nearly $2 million to settle a federal lawsuit accusing the company of violating Medicaid rules and not paying the state Medicaid program for drug coverage.
The case was brought by a group of state Medicaid officials and the New York attorney general’s office.
Walgreen, a unit of Walgreens Inc., said it would make the payments to state Medicaid directors.
The settlement follows a two-week court hearing last week in which attorneys for the Medicaid program said Walgreen misled Medicaid officials about the extent of the drug shortage.
The company’s lawyer said that after Walgrys initial decision to pay out, the state continued to struggle with the problem.
Walmart had previously said it had no plans to pay the state money, saying it was only doing so in response to “very significant” demand from Medicaid.
The company said it still has to meet some of its requirements, including paying Medicaid for its share of the cost of drugs.
Walgasco, which was not a defendant in the case, said it agreed to settle to prevent another lawsuit.
The agreement, reached Thursday, requires the state to pay Walgills $2,842,000, including $1,928,000 for an administrative fee and $1 million in restitution.
Walgreys lawyers said they plan to appeal the settlement.
The lawsuit was brought in federal court in New York by the Medicaid Directors Association, which said Walgasco violated Medicaid rules by not paying for the drug coverage and withholding payments.
The lawsuit said Walgreys was in violation of federal law that requires states to pay for drug benefit for Medicaid enrollees.