WASHINGTON — Ahold Delhaize USA has agreed to pay $40 million to resolve allegations that it violated the False Claims Act by submitting claims to federal healthcare programs with inflated prescription drug prices, the U.S. Department of Justice announced Wednesday.
The government alleged that pharmacies operating within Ahold Delhaize-owned supermarket chains, including Giant, Hannaford, Stop & Shop and Food Lion, failed to report discounted prescription prices from savings programs as their “usual and customary” prices when billing Medicare Part D, Medicaid and TRICARE. According to the Justice Department, the practice caused the programs to pay more for prescription claims than they otherwise would have.
“Federal healthcare programs rely on pharmacies reporting accurate pricing information used in the applicable payment formulas,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “If pharmacies report inflated ‘usual and customary’ prices on claims to federal healthcare programs, the programs pay more than they should on those claims.”
The settlement resolves allegations that discounted prices available to enrolled members of prescription savings programs should have been reported as the pharmacies’ customary prices under federal program requirements. The government contended that failing to do so led to inflated reimbursement amounts.
U.S. Attorney Troy Rivetti for the Western District of Pennsylvania said the settlement demonstrates the government’s commitment to addressing alleged misconduct in taxpayer-funded healthcare programs.
Of the $40 million settlement, approximately $32.9 million will go to the federal government, with the remainder distributed to participating states. The Medicaid program is jointly funded by the federal and state governments.
The case stemmed from a whistleblower lawsuit filed by pharmacist Lawrence LaBenne, a former employee of an Ahold Delhaize supermarket pharmacy in Pennsylvania. Under the settlement, LaBenne will receive approximately $6.1 million from the federal share of the recovery.
The settlement resolves only the allegations, and there has been no determination of liability. Ahold Delhaize did not admit wrongdoing as part of the agreement.
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