Wal-Mart settles pharmacy suit with MediCal for $1.65 million

Wal-Mart Stores operates about 280 pharmacies in the state of California in conjunction with its retail business, which was sued by the state’s medicaid program in federal court. The allegations made by Medi-Cal were that Wal-Mart knowingly submitted reimbursement claims which did not carry the appropriate diagnosis, nor documentation, according to the U.S. Department of Justice.

The retail giant settled the suit for $1.65 million, of which about $264,000 will be paid to the whistleblower, who was a Wal-Mart pharmacist in the Sacramento area.

The DOJ said California’s state Medicaid system uses a list known as “Code 1” drugs which carry restrictions for each listed drug, including restrictions related to diagnoses. Some Code 1 drugs are approved for reimbursement only for approved diagnoses. Pharmacies are required to certify when Code 1 drugs are dispensed for the approved diagnoses.

“Wal-Mart may bill for drugs prescribed outside of the approved diagnoses only if it submits a request to the Department of Healthcare Services that includes a justification for the non‑approved use,” the DOJ said.

The suit also charged that Wal-Mart at times gave out drugs for non-approved diagnoses, then billed MediCal for them, according to the DOJ.