United States Attorney Erica H. MacDonald and Massachusetts Attorney General Maura Healey today announced that Target Corporation has agreed to pay a total of $3,000,000 to resolve allegations that it violated the federal False Claims Act and Massachusetts False Claims Act by submitting claims for payment to Massachusetts’ Medicaid program in violation of rules prohibiting Medicaid prescriptions from being automatically refilled.
Massachusetts’ Medicaid program, called MassHealth, is jointly funded by the federal government and the Commonwealth of Massachusetts to provide health care to low-income individuals. Along with at least 20 other states, Massachusetts does not allow pharmacies to automatically refill prescriptions paid for by Medicaid without an explicit request from the beneficiary for each refill. This policy provides an important control against wasted or unnecessary prescriptions that are reimbursed by taxpayer funds.
According to the allegations in the complaint, Target pharmacies knowingly and routinely enrolled MassHealth beneficiaries in the company’s auto-refill program, and billed MassHealth for prescriptions in violation of the state’s regulation prohibiting the practice. This practice continued until Target sold its pharmacy business to CVS Health in or around December 2015.
“This resolution demonstrates our ongoing commitment to ensuring compliance with rules that are specifically designed to protect taxpayer funds and prevent wasted medications,” said United States Attorney Erica H. MacDonald.
"Unauthorized automatic refills can result in inappropriate prescription drug use and wastes taxpayer dollars," said Massachusetts Attorney General Maura Healey. "This settlement will bring money back to our state and will help ensure that our health care resources reach those who need them the most."
This settlement resolves allegations filed in a civil lawsuit originally brought by a whistleblower under the qui tam provisions of the federal False Claims Act and Massachusetts False Claims Act, which allow private parties to bring suit on behalf of the government for false claims and to share in any recovery. The government often relies on whistleblowers to bring fraud schemes to light that might otherwise go undetected.
In this civil settlement, Target has denied the allegations of wrongdoing and False Claims Act liability. Target cooperated with the government’s investigation of this matter.
The case was handled by the Civil Division of the U.S. Attorney’s Office for the District of Minnesota and the Medicaid Fraud Control Unit of the Massachusetts’ Attorney General’s Office.
The case is United States of America, State of Minnesota, Commonwealth of Massachusetts, State of New York, and Commonwealth of Virginia, ex rel. Ryan Mesaros v. Target Corp., Civil No. 15-CV-2684 (PAM/TNL). The claims resolved by the settlement are allegations only; there has been no determination of liability.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600