Di parent company of Stop & Shop don agree to pay federal and state governments $40 million last week, after dem face allegations say dem illegally report prices of some drugs for dia pharmacies.
Ahold Delhaize, wey get dia base for Massachusetts and be owner of Stop & Shop, Giant, Hannaford and Food Lion, announce di agreement with Department of Justice on June 10.
Di company originally get sued by Lawrence LaBenne, wey be pharmacist for one of dia supermarkets for Pennsylvania. LaBenne allege say di company don dey overbill government for some prescription drugs by reporting inflated prices.
Scott Lampert, wey be acting deputy inspector general for federal Department of Health and Human Services, tok say: “Pharmacies for federal health care programs must report truthful prices. Inflating those prices, as alleged here, puts di integrity of taxpayer-funded programs at risk.”
According to di settlement agreement, between May 2013 and September 2017, pharmacies for Stop & Shop and oda grocers run savings programs for some prescription drugs wey give customers discounted drug prices.
Di lawsuit allege say those discounted prices suppose don treat as “usual and customary” prices when di pharmacies dey bill various Medicare and Medicaid programs. But di company instead submit claims wit higher drug prices, wey make federal programs pay more than dem suppose.
Ahold Delhaize no admit any wrongdoing as part of di settlement agreement.
As part of di settlement, di federal government collect $32.8 million, while state governments wey participate for Medicaid program collect $7.2 million. Dis one include $2.8 million for New York, $1.8 million for Connecticut, and $1.3 million for Massachusetts.
For im role as whistleblower, LaBenne go receive just over $6 million.
U.S. Attorney Troy Rivetti tok for DOJ release: “Dis settlement confirms say di United States go take all necessary steps to bring to justice dishonest pharmacies.”
Nathaniel Rosenberg be Hearst Fellow wey dey cover breaking and trending news wit Hearst Connecticut. Im before write for Philadelphia Inquirer, Milwaukee Journal Sentinel and New Haven Independent. Nathaniel graduate from Yale University wit degree for History.
Di $40 million settlement bring conclusion to years-long legal battle wit Ahold Delhaize USA, wey spark by whistleblower lawsuit wey cast spotlight on how grocery pharmacy chains dey report drug pricing to government-subsidized healthcare programs.
Assistant Attorney General Brett A. Shumate of di Justice Department’s Civil Division tok: “Federal healthcare programs rely on pharmacies reporting accurate pricing information used in di applicable payment formulas. If pharmacies report inflated ‘usual and customary’ prices on claims to federal healthcare programs, di programs pay more than dem suppose on those claims.”
Di settlement address allegations say Legacy Ahold and Legacy Delhaize chains overcharge government healthcare programs through dia in-store prescription savings programs. According to federal prosecutors, Legacy Delhaize stores from 2009 to 2016 and Legacy Ahold stores from 2013 to 2017 offer discounted drug prices to customers wey enroll for dia respective choice savings programs.
Di government contend say under di rules of Medicare Part D, Medicaid, and TRICARE, dese lower, promotional prices suppose don report as di pharmacies’ “usual and customary” prices. Instead, di chains allegedly fail to report di discounts, wey make di taxpayer-funded healthcare programs pay inflated amounts for routine prescriptions.
Di settlement explicitly state say di agreement no be admission of liability by ADUSA, nor be concession by di government say di claims lack merit; rather, dem reach am to avoid di expense and uncertainty of protracted litigation.
Di government’s case build on di False Claims Act, a federal law wey date back to di Civil War and be di government’s primary weapon against fraud. Di act impose significant financial liabilities on individuals and companies wey knowingly submit false claims to di government for payment or approval.
A key element of dis case be di law’s qui tam provision. Dis unique mechanism allow private individuals, known as “relators” or whistleblowers, to file lawsuits on behalf of di United States government.
Di case file for U.S. District Court for di Western District of Pennsylvania by whistleblower Lawrence LaBenne. As a reward for exposing di billing discrepancies, di False Claims Act entitle di whistleblower to a percentage of di recovered funds. For dis settlement, LaBenne go receive more than $6 million from di federal share, while im legal counsel go receive $765,000 for fees and costs.
As dis be False Claims Act lawsuit regarding government billing rather than consumer class-action suit, everyday grocery shoppers and pharmacy patients no eligible to receive direct individual cash payouts. Instead, di $40 million payout serve as restitution to replenish public funds.
While individual shoppers no go receive check for mail, di settlement include crucial protection clause for consumers. Per di agreement, ADUSA strictly prohibited from seeking any retroactive billing or payment adjustments from healthcare beneficiaries, dia parents, or sponsors to make up for di claims cover under dis dispute.
