Walmart paying $825,000 to settle Minnesota Medicaid billing dispute

Walmart Stores Inc. and its Sam's Club division are paying $825,000 to settle allegations that they wrongly submitted claims for payment to Minnesota's Medicaid program in violation of rules on automatic prescription refills.

The settlement announced this week from Gregory Brooker, the U.S. attorney for Minnesota, and state Attorney General Lori Swanson concludes a whistleblower lawsuit that alleged pharmacies run by Arkansas-based Walmart and Sam's Club routinely enrolled Minnesota Medicaid beneficiaries in automatic refill programs even though beneficiaries are required to request refills.

The rule is meant to prevent waste or unnecessary prescriptions that are paid for by taxpayers, Brooker's office said in a news release. It noted the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Walmart and Sam's Club denied the allegations of wrongdoing and did not admit liability. A spokesman for the retailer said: "We are pleased to have settled the matter."

Medicaid is a state-federal health insurance program for low-income people. The allegations were initially filed in a civil whistleblower lawsuit by Ryan Mesaros, a Minnesota resident and pharmacist who said he was employed by the retailers from June 2012 through May 2014.

Filed initially in November 2014, the lawsuit stated: "Defendants have submitted or caused to be submitted claims to Medicaid for 'non-covered' services, involving dispensing of pharmaceuticals to patients that resulted in the provision of excessive prescriptions and waste of government monies and resources."

Whistleblower lawsuits filed under state and federal statutes on false claims let private parties bring suit on behalf of the federal government for false claims and to share in any recovery.

The settlement agreement calls for Walmart to pay $412,500 to the federal government and $412,500 to the state of Minnesota. Then, the state and federal government will each pay $78,375 to the whistleblower.

Walmart also agreed to pay $110,000 for the whistleblower's expenses, attorney fees and costs associated with the civil action, according to the settlement agreement.

Brooker said in a statement: "Businesses that participate in federally and state funded health care programs have a responsibility to ensure compliance with the rules, specifically rules that are in place to avoid unused prescription medications and wasted taxpayer funds."

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck