Target Corporation has agreed to pay $3 million in a False Claims Act settlement to resolve claims that the retailer submitted fraudulent Medicaid claims.

On Dec. 11, United States Attorney Erica H. MacDonald for the District of Minnesota and Massachusetts Attorney General Maura Healey announced the False Claims Act settlement which resolves allegations that Target violated the federal and Massachusetts state versions of the law.

“Target did not follow state and federal regulations put in place to prevent waste in our MassHealth system,” said Healey in a statement. “This settlement will bring money back to our state and will help ensure that our health care resources reach those who need them the most.”

Allegations against Target argued that the company submitted claims to Massachusetts’ Medicaid program in violation of rules which prohibit Medicaid prescriptions from being filled “without an explicit request from the beneficiary for each refill”. This policy controls wasted or unnecessary prescriptions and saves taxpayer dollars, but Target allegedly failed to align with the practice.

“Unauthorized automatic refills can result in inappropriate prescription drug use and wastes taxpayer dollars,” Healey said in a statement. “This settlement will bring money back to our state and will help ensure that our health care resources reach those who need them the most.”

The $3 million False Claims Act settlement will pay $1.5 million to the United States government and around $1.46 million to Massachusetts as compensation for their allegedly fraudulent claims. Ryan M., the pharmacist who filed the whistleblower suit, will receive $570,000 from the federal government for bringing the suit and his attorneys will receive $230,000 from Target.

Ryan filed his whistleblower suit in 2015. Having worked at 17 of the 75 Target pharmacies in Minnesota, he alleged that he saw that all of them used the same automatic refill practices. Ryan reportedly discovered through the pharmacy’s system that these practices were applied uniformly at all Minnesota pharmacies, which prompted an investigation into the issue in Massachusetts, New York, and Virginia.

According to Ryan’s whistleblower suit, Target knowingly enrolled Massachusetts Medicaid recipients into the company’s automatic refill program between August 2009 and July 2015. The practice was allegedly halted in 2015 after Target sold its pharmacy business to CVS Health. However, Massachusetts Medicaid claims which were a result of Target’s former automatic refill practice allegedly violate federal law.

Although Target is paying millions to resolve the whistleblower lawsuit, the company does not admit wrongdoing by reaching a False Claims Act settlement.

“We have cooperated with federal and state authorities to provide information about the prescription auto-refill program Target offered before we sold our pharmacy business in 2015, including our efforts to comply with Medicaid program laws,” said Target spokeswoman Danielle Schumann in a statement to Law360. “We are satisfied that this issue is now resolved.”

The government has expressed similar satisfaction with the False Claims Act settlement.

“This resolution demonstrates our ongoing commitment to ensuring compliance with rules that are specifically designed to protect taxpayer funds and prevent wasted medications,” MacDonald said in a statement.

The False Claims Act Settlement is Case No. 0:15-cv-02684 in the U.S. District Court for the District of Minnesota.