Settlement resolves allegations involving prescription pricing reported to programs.
Ahold Delhaize USA Inc., a grocery company based in Massachusetts, has agreed to pay $40 million to settle allegations involving prescription drug pricing reported to government healthcare programs. The agreement resolves claims brought by the federal government and participating states, although the company has not admitted wrongdoing. According to the U.S. Department of Justice (DOJ), the case centered on how certain prescription drug prices were reported to Medicare, Medicaid, and TRICARE. Federal officials alleged that some pharmacies operating inside Ahold Delhaize-owned grocery stores did not report lower discounted prices that were available through customer savings programs. As a result, government healthcare programs allegedly paid more for prescriptions than they otherwise would have.
The company operates supermarket chains across several states, including Giant, Hannaford, Stop & Shop, Food Lion, and other grocery brands that offer pharmacy services. Investigators focused on prescription savings programs that provided discounted medication prices to enrolled customers. Officials said that when pharmacies submit claims to government healthcare programs, they are required to report what are known as “usual and customary” prices. Those figures help determine how much the government pays for prescription medications. The government claimed that discounted prices available through the savings programs should have been reported as the usual prices in many cases. Instead, authorities alleged that higher prices were reported on certain claims. Because payment formulas often depend on those reported prices, Medicare, Medicaid, and TRICARE allegedly paid more than they should have for some prescriptions.
The settlement brings an end to the government’s pricing claims without a court ruling on liability. The DOJ noted that the allegations remain claims only and that no determination was made that the company violated the law. A portion of the settlement came from a whistleblower lawsuit filed by a former pharmacist who worked for one of the company’s stores in Pennsylvania. The lawsuit was filed under the False Claims Act, a federal law that allows private individuals to bring cases on behalf of the government when they believe taxpayer funds are being improperly spent.
The whistleblower, Lawrence LaBenne, alleged that the company’s reporting practices resulted in inflated payments from federal healthcare programs. Under False Claims Act rules, individuals who bring successful cases may receive a percentage of the recovered funds. As part of the settlement, LaBenne will receive more than $6 million from the federal share of the recovery. Of the $40 million total settlement, approximately $32.9 million will go to the federal government. The remaining funds will be distributed among participating states that help fund Medicaid programs.
Government officials said accurate pricing information is important because public healthcare programs depend on pharmacies to provide truthful data when submitting claims. Those programs serve millions of Americans and are supported in part by taxpayer dollars. The DOJ continues to pursue cases involving suspected healthcare fraud and billing practices that may affect government-funded programs. Authorities encourage individuals with information about possible fraud, waste, or abuse involving healthcare programs to report their concerns to the appropriate agencies. While the matter has been resolved through a financial agreement, the case serves as another example of the government’s ongoing review of healthcare billing and pricing practices across the U.S.
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Ahold Delhaize U.S. agrees to pay $40 million in healthcare claims pricing settlement
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