HEB Grocery Company Agrees to Pay $12 Million to Settle Texas Medicaid Fraud


On March 17, 2014, a Texas state court dismissed a qui tam lawsuit against HEB Grocery Co. after HEB reach an agreement with the Texas Attorney General’s Civil Medicaid Fraud Division to pay a combined $12 million to settle claims that HEB overcharged the Texas Medicaid program for prescription drugs.

Texas law requires pharmacies to submit reports to Medicaid disclosing the prices they charge customers. The qui tam plaintiffs alleged that, from 2006 to 2014, HEB disregarded the discounted prices it charged certain rewards program customers and instead knowingly submitted inflated pricing information for certain prescription drugs, which caused Medicaid to over-reimburse its pharmacies.

Much like the prior Hi-Tech Pharmacal agreement struck earlier this year (link to: http://www. akingump. com/en/experience/practices/litigation/false-claims-act-qui-tam-defense/state-fca-resource-center/hi-tech-pharmacal-co-to-pay-25-million-in-settlement-with-texas. html), the HEB agreement provides that the settlement represents only a compromise on the disputed issues and “is neither an admission of facts or liability by HEB, nor a concession by the State that the State’s allegations and claims are not well-founded ...”  The agreement requires HEB to pay the government $12 million. The relators will receive their share of nearly $2 million from that sum. The settlement agreement is available here (link to: http://op. bna. com/hl. nsf/id/bbrk-9hlu3j/$File/HEBstoresettles. pdf).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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