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Walgreens has paid the United States and Minnesota and three other states nearly $10 million to resolve allegations of falsely billing Medicaid, the U.S. Justice Department announced Monday, with some of that money going to two Twin Cities pharmacists who turned in the industry giant.

The United States initiated the investigation in response to a lawsuit brought by pharmacists Daniel Bieurance and Neil Thompson.

As a result of the settlement, the pharmacists will divide $1.44 million out of the $9.9 million recovery. An attorney for the pharmacists said that Thompson still works part time for Walgreens on Hiawatha Avenue in south Minneapolis; Bieurance left Walgreens for another job in pharmacy. Thompson also has a law practice in Minneapolis.

Under the False Claims Act, private individuals can bring such actions for fraud on behalf of the federal government and collect a share of any proceeds recovered. Under state False Claims Acts, private individuals can also bring actions for fraud on behalf of those states and receive a share of the proceeds.

Illinois-based Walgreens charged Minnesota, Florida, Michigan and Massachusetts as if some Medicaid recipients were uninsured, the Justice Department said, when those members were actually covered by Medicaid and by private insurance. The department said Walgreen was entitled to a copay, but instead, charged the difference between what the insurance companies paid for the drugs and what the Medicaid programs would have paid if the recipients were uninsured.

At times, it is cheaper for the Medicaid program to avoid the full costs of medical care for a recipient by paying that person's private insurance premiums and copays. Typically, that is the case for someone with insurance who has a critical illness or accident, can no longer work and cannot afford to keep paying for insurance.

As a result of this improper billing, Walgreens received reimbursement amounts from the states' Medicaid programs that were higher than it was entitled to receive.

Walgreens spokesman Michael Polzin blamed the problem on "inadvertent billing errors" because of a "unique requirement for Medicaid billing when Medicaid is a secondary insurer."

According to the Justice Department, after the two pharmacists receive their share, the state of Minnesota will receive nearly $1.47 million in the settlement.

A lawyer for the two pharmacists said the men were willing to speak publicly about their action only with an attorney present, and that could not be arranged on Monday.

Star Tribune staff writer Warren Wolfe contributed to this report. Paul Walsh • 612-673-4482