Target pay $3 million to settle fraudulent Medicaid billing whistleblower case

Target Corp. will pay $3 million to settle allegations that it violated federal and state law by improperly billing and receiving payments from the state’s Medicaid program (MassHealth), Attorney General Maura Healey announced today.

Under the terms of the settlement, Target Corp. will pay $3 million to resolve allegations that from August 2009 through July 2015, the company operated an unauthorized automatic refill program at their Massachusetts locations.

Current regulations prohibit pharmacies in Massachusetts from automatically refilling prescriptions that were not explicitly requested by a MassHealth patient or caregiver at the time of each filling event. The AG’s Office alleges that Target automatically refilled prescriptions and billed MassHealth inappropriately for them

“Target did not follow state and federal regulations put place to prevent waste in our MassHealth system,” said AG 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.”

The AG’s Office has previously taken action against pharmacies for using improper automatic refill programs for MassHealth members. In August, PharmaHealth agreed to pay $360,000 to settle allegations of operating an unauthorized automatic refill program. In 2015, Neighborhood Diabetes paid $1.5 million to resolve allegations of improper billing and in 2013, AllCare Pharmacy paid $1.6 million to settle with the AG’s Office to resolve similar allegations.

The investigation stemmed from a qui tam action brought by a whistleblower in the United States District Court for the District of Minnesota. The qui tam action alleged claims under the federal False Claims Act and the Massachusetts False Claims Act.

The matter was handled by Assistant Attorney General Evelyn Tang and Supervising Investigator Christopher Cecchini both of AG Healey’sŒ Medicaid Fraud Division, and the Civil Division of the U.S. Attorney’s Office for the District of Minnesota.