On December 2, the U.S. District Court for the Western District of Virginia granted a motion to dismiss a False Claims Act (FCA) lawsuit brought by the United States and the Commonwealth of Virginia, which alleged that a Walgreens clinical pharmacy manager falsified hepatitis C drug prior authorization submissions to Virginia Medicaid. See United States v. Walgreen Co., 2021 WL 5760307 (W.D. Va. Dec. 3, 2021).
In dismissing the case, the district court reasoned that the prior authorization requirements were not “material” to payment as required to state an FCA claim within the meaning of the Supreme Court’s opinion in Universal Health Servs., Inc. v. U.S. ex rel. Escobar because Virginia Medicaid’s prior authorization requirements were unlawful under §1927(d)(1) and (2) of the Social Security Act. The district court’s opinion entirely rejected the government’s theory of FCA liability, concluding that “[t]he allegations reveal that Walgreens did not receive any payment that it was not entitled to receive.”
The Virginia Department of Medical Assistance Services (DMAS) administers the Virginia Medicaid program through contracted third parties, including Managed Care Organizations (MCOs), to provide prescription drugs and other services to Virginia Medicaid recipients.
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