Walgreen Settles

Here is the next story in what seems like an endless succession of prominent health care companies settling lawsuits alleging improper behavior, via the Minneapolis Star-Tribune:

Walgreens has paid the United States and Minnesota and three other states nearly $10 million to resolve allegations of falsely billing Medicaid, the U.S. Justice Department announced Monday, with some of that money going to two Twin Cities pharmacists who turned in the industry giant.

Illinois-based Walgreens charged Minnesota, Florida, Michigan and Massachusetts as if some Medicaid recipients were uninsured, the Justice Department said, when those members were actually covered by Medicaid and by private insurance. The department said Walgreen was entitled to a copay, but instead, charged the difference between what the insurance companies paid for the drugs and what the Medicaid programs would have paid if the recipients were uninsured.

As a result of this improper billing, Walgreens received reimbursement amounts from the states' Medicaid programs that were higher than it was entitled to receive.

Walgreens spokesman Michael Polzin blamed the problem on 'inadvertent billing errors' because of a 'unique requirement for Medicaid billing when Medicaid is a secondary insurer.'

This is the second settlement of this kind we have discussed this week. Its immediate predecessor was the Cephalon settlement. Earlier this year we discussed settlements by Staten Island University Hospital, Amerigroup, UnitedHealth, Anthem Blue Cross and Blue Shield, and HealthMarkets, Express Scripts, Kyphon (Medtronic subsidiary) and Merck. Of course, to these could be added various other ethical lapses, including some involving guilty pleas to criminal charges (e.g., Biovail, and at UMDNJ)

Juxtaposing these events in a procession suggests there are serious systemic ethical problems in the leadership of health care organizations. Moreover, these problems likely have cumulative adverse effects on heath care costs, access and quality, and on the morale of health care professionals. However, outside of Health Care Renewal, there seems to be almost no discussion that so juxtaposes them. In particular, try to find any mention of them in the health services research, health care research and health care policy literature.

Furthermore, while these settlements serve to mark the unethical behavior of the organizations and individuals involved, they never seem to have a large enough monetary value to actually discourage such behavior. As long as health care leaders can shrug off the consequences of unethical behavior merely as acceptable costs of doing business, absent any serious attempts to get health care organizations to enforce internal codes of ethical behavior or to avoid hiring ethically challenged leaders, the procession will likely continue. The effects will be continually rising costs, declining quality, shrinking access, and rising numbers of demoralized health professionals.

Maybe at a time when many people see arrogant, greedy, and unethical executives as the main reason our financial system seems to be in incipient collapse, they will also realize that the same sorts of executives may be a major cause of our ongoing health care crisis.