Rite Aid Corp. has agreed to pay nearly $3 million to settle the U.S. Justice Department's allegations that the drugstore chain doled out gift cards to Medicare and Medicaid beneficiaries to induce them to transfer their prescriptions to the stores' pharmacies.
In a statement, Rite Aid said, “We have denied the government’s allegations and we are pleased to resolve the matter and avoid future litigation.” The settlement does not indicate liability on the part of Rite Aid, according to the Justice Department.
The government alleged that Rite Aid violated the False Claims Act by “knowingly and improperly” influencing Medicare and Medicaid beneficiaries to move their prescriptions to the stores in exchange for gift cards from 2008 to 2010. Rite Aid is a Delaware corporation with its headquarters in Camp Hill, Pa.
A whistle-blower, Jack Chin, made the original allegations. Under the False Claims Act, whistle-blowers may bring cases on behalf of the government and are entitled to a share of the recovery. Chin will get about $508,300, according to the Justice Department.
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