FOR IMMEDIATE RELEASE
Date: June 13, 2002
Contact: Timothy H. Barron
Director, Medicaid Fraud Control Unit
Wilmington, DE - Delaware Attorney General M. Jane Brady announced on June 3, 2002 that 18 state Medicaid Programs recovered over seven million dollars as a result of a settlement with Eckerd Corporation. Eckerd is a Florida based national retail pharmacy chain which currently operates approximately 2,640 stores in 20 states. In 1997, Eckerd was acquired by JC Penney Company. Eckerd agreed to pay a total of $9 million to the federal and state governments to settle allegations that the company submitted false claims to federal and state health care programs. The State of Delaware's Medicaid Program will recover a total of $23,654.71
The National Association of Medicaid Fraud Control Units (NAMFCU), representing the Medicaid Fraud Control Units in 47 states and the District of Columbia, worked closely with numerous federal agencies, including the United States Department of Justice, and the Office of Inspector General for the United States Department of Health and Human Services, to reach this global settlement. Eckerd agreed to settle charges that it billed federal and state health care programs for quantities of medication that exceeded the amounts that were actually given to customers. The government alleged that Eckerd dispensed partial or "short" prescriptions, due to insufficient stock, but billed the government health care programs for the full quantities of the medication prescribed. The settlement covers the time period of January 1, 1986 to May 1, 2000.
This agreement settles a dispute with Eckerd originally brought as a qui tam case in United States District Court for the Middle District of Florida. Eckerd resolved a related criminal investigation in July, 2001 and paid a fine of $1.7 million.
The terms of the Eckerd settlement include an Integrity Agreement that will be administered by the Office of Inspector General of the Department of Health and Human Services in which Eckerd agreed to modify its pharmacy billing operations to ensure future compliance with applicable laws and Medicare and Medicaid rules and regulations. The Integrity Agreement requires the company to monitor these practices for problems, and establishes sanctions for violations. The state Medicaid Fraud Control Units assisted in the development of the Integrity Agreement.
Leading the state negotiating team were the Medicaid Fraud Control Directors from Florida, Georgia, South Carolina and North Carolina. For further information, please contact Barbara Zelner, counsel for the National Association of Medicaid Fraud Control Units at (202) 326-6020 or Tim Barron at (302) 577-8504.