In December 2021, Walgreen Co (Walgreens) paid $512,923.78 for allegedly violating the Civil Monetary Penalties Law, including provisions applicable to kickbacks. The United States Department of Health and Human Services Office of Inspector General (HHS OIG) alleged that Walgreens paid remuneration in the form of discounts on retail product purchases at Walgreens locations in Puerto Rico to more than 1700 health care professionals who wrote prescriptions for items filled at Walgreens locations in Puerto Rico that were paid for by a federal health care program.
Prior CIA
This payment by Walgreens follows a December 2018 Corporate Integrity Agreement (CIA) between Walgreens and HHS OIG. Under that CIA, Walgreens was required to appoint a Compliance and Ethics Officer and keep someone in that role for the term of the CIA. That individual is responsible for making periodic (at least quarterly) reports regarding compliance matters to the Audit Committee of the Board of Directors.
The Audit Committee
The Audit Committee was, in turn responsible for reviewing and overseeing matters related to compliance with federal health care program requirements and CIA requirements. As part of its responsibilities, the Audit Committee needed to submit a description of the documents and other materials reviewed (and any additional steps taken) in its oversight of the Walgreens compliance program.
Disclosure
The CIA also required that Walgreens establish a Disclosure Program that allowed individuals a way to disclose issues or questions that are identified as possibly being a violation of criminal, civil, or administrative law. The Disclosure Program also required all of Walgreens’ Covered Persons are be expected to report suspected violations of any Federal health care program requirements to the Compliance and Ethics Officer or other appropriate individual designated by Walgreens.
Upon receipt of a disclosure, the Compliance and Ethics Officer (or designee) needs to gather all relevant information from the disclosing individual and make a preliminary, good faith inquiry into the allegations included in the disclosure to ensure that he or she has obtained all of the information necessary to determine whether a further review should be conducted. If any disclosure reasonably permits a determination of the appropriateness of the alleged improper practice and provides an opportunity for taking corrective action, Walgreens then conducts an internal review of the allegations set forth in the disclosure.
The Compliance and Ethics Officer (or other designee) is also required to maintain a disclosure log in which he or she records each disclosure in the disclosure log within two business days of receipt of the disclosure. The disclosure log must include a summary of each disclosure received (whether anonymous or not), the status of the respective internal reviews, and any corrective action taken in response to the internal reviews.
Reporting Requirements
In addition to an initial implementation report, Walgreens is responsible for filing annual reports under the CIA. The annual report must include the dates of any reports made by the Compliance and Ethics Officer and/or the Global Chief Compliance and Ethics Officer regarding Walgreens compliance matters to the Audit Committee of the Board. The annual report must also include a summary of the disclosures in the disclosure log related to Federal health care programs, including: a description of the disclosure; the date the disclosure was received; the resolution of the disclosure; and the date the disclosure was resolved (if applicable).
This settlement was in response to self-disclosed conduct, but it is not noted whether the self-disclosure came in the form of an annual report or other report to HHS OIG.