Duane Reade has agreed to pay $370,000 to settle allegations that it defrauded the New York State Medicaid program. The original whistleblower lawsuit charged that company’s Kiosk Program violated state and federal Anti-Kickback statutes.
Automated kiosks were installed in physicians’ offices to allow and encourage patients to fill their prescriptions at Duane Reade. Patients could enter prescription information into the kiosks and pick up their prescriptions at a local Duane Reade. The company’s monthly “rent” payments to participating physicians violated the Anti-Kickback statutes by paying higher “rents” to physicians who generated a high volume of prescriptions.