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Compliance with the Deficit Reduction Act

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					               Procedure for Compliance with the Deficit Reduction Act

Overview             Associates and Pharmacy contractors and agents must comply with all federal,
                     state and local laws and regulations, including laws prohibiting the submission
                     of false or fraudulent claims to the government or third party payor. This
                     includes claims for services not provided, or claims that do not comply with
                     applicable program or contractual requirements.1 Pharmacy contractors must
                     either adopt Wal-Mart’s policy or create their own policies that comply with
                     §6032 of the Deficit Reduction Act of 2005. These policies should be
                     disseminated to the contractor’s employees and managers.

                     The purpose of this POM is to address proper billing practices and to provide
                     information regarding: (1) the federal and state False Claims Acts; (2) related
                     federal administrative remedies for false claims and statements, and other state
                     laws that provide for legal sanctions in connection with making false claims or
                     statements; (3) protections for individuals who in good faith report under such
                     laws; and (4) Pharmacy’s commitment to detecting and preventing fraud, waste
                     and abuse in federal and state health care programs. This POM is intended to
                     satisfy Section 6032 of the Deficit Reduction Act of 2005 (“DRA”) (codified at
                     section 1902(a)(68) of the Social Security Act).

False Claims         Federal False Claims Act (31 U.S.C. §§3729-3733) (“FCA”). A federal law
Act                  which imposes civil liability on persons or entities who, among other things:

                          A. Knowingly present or cause to be presented a false or fraudulent claim
                             for payment to the United States;
                          B. Knowingly use a false record or statement to obtain payment on a false
                             or fraudulent claim paid by the United States; or
                          C. Conspires to defraud the United States to obtain allowance for or
                             payment of a false or fraudulent claim.

                     The False Claims Act defines “knowing” or “knowingly” as having actual
                     knowledge of the falsity of the claim, acting in deliberate ignorance of the truth
                     or the falsity of the claim, or acting in reckless disregard of the truth or falsity
                     of the claim. Specific intent to defraud is not required. A common example
                     used to describe the knowledge requirements under the False Claims Act is a
                     person who knew or should have known the claim was false.

                     The False Claims Act is a federal law that imposes legal responsibility on
                     individuals or entities who, among other things present a false or fraudulent
                     claim for payment to the United States Government. In the case of Pharmacy,

1
 For purposes of this POM, the terms “contractor” and “agent” are defined as any contractor, subcontractor, agent,
or other person who, as an agent and on behalf of Pharmacy furnishes or otherwise authorizes the furnishing of
Medicaid health care items or services, performs billing or coding functions for Pharmacy, or is involved in
monitoring of health care provided by Pharmacy to Medicaid recipients.



                                                         1
                this could involve for example, circumventing the Partial Fill process or not
                following the Return to Stock procedure.

                This is a highly complex area of law. This POM and the Code of Conduct
                cannot list all of the situations in which the false claims laws might apply.
                Therefore, Pharmacy Associates must take special care in this area. Associates
                must promptly refer any questions to the Compliance Officer, who, as
                appropriate, may refer the question(s) to the Legal Department.

                Associates should refer any concerns on claims preparation or submission to the
                Professional Services Compliance Office directly or may call the Pharmacy
                Compliance Hotline anonymously.


Violations of   Violations of the False Claims act are subject to civil monetary penalties of
the False       $5,500 to $11,000 for each false claim filed, plus treble damages (three times
Claims Act      the amount of damages sustained by the United States as a result of the false
                claims).

                Examples of conduct that could violate the False Claims Act and other federal
                billing laws include:
                     • Billing for services or supplies not provided
                     • Misrepresenting the diagnosis/code to justify the services or product
                        furnished
                     • Improperly altering claims to obtain a higher payment amount
                     • Engaging in duplicate billing to obtain reimbursement that the
                        Pharmacy Division is not entitled
                     • Offering, paying, soliciting or receiving a kickback, bribe or rebate
                     • Falsifying services provided, amount charged for services, identity of
                        the person receiving the service, dates of services, etc.
                     • Routinely waiving patient co-payment amounts or deductibles without
                        verifying a patient’s financial need
                     • Misrepresenting dates, frequency, or description of services rendered, or
                        the identity of the services or the individual who rendered the services
                     • Intentionally falsifying, destroying or withholding records relating to the
                        billing and claims submission function

Associate       Pharmacy Associates should perform their job duties in a manner that is
Compliance      consistent with federal and state fraud and abuse laws governing pharmacy
with the FCA    services. At a minimum, Associates must comply with the following:
                    • No Associate should accept or offer anything of value in order to
                        influence a decision affecting the referral of patients.
                    • Claims should not be submitted for payment for items/services that are
                        not furnished.
                    • Claims should not be misrepresented in order to obtain higher
                        reimbursement, or coverage for products that are not otherwise covered.
                   •   Each billing claim submitted should be accurate and should follow the
                       regulations established by Medicare, Medicaid, and other payors.

The Basic          •   Associates should prepare appropriate supporting documentation for all
Rules                  products or services provided. Claims are submitted on the principle
                       that if the appropriate and required documentation has not been
                       provided, then the product has not been provided.
                   •   In all cases, federal and state regulations take precedence over
                       Pharmacy policies and procedures; however, Pharmacy policies and
                       procedures should accurately reflect those regulations.
                   •   Government-sponsored payors are not to be charged more than
                       Pharmacy’s usual charges. Any questions regarding the interpretation
                       of this should be directed to the Professional Services Compliance
                       Office.
                   •   Associates should be familiar with the Third Party Billing Procedures
                       (POM 1201). Each Pharmacy Manager is responsible for ensuring their
                       Associates are properly trained and understand the training material.
                   •   An accurate and timely billing structure and pharmacy records system is
                       critical to ensure that Associates can effectively implement and comply
                       with all required procedures.

Program         The Program Fraud Civil Remedies Act of 1986 (“PFCRA”), provides for
Fraud and       administrative remedies against persons who make, or cause to be made, a false
Civil           claim or written statement to certain federal agencies, including the agency that
Remedies Act    administers the Medicare Program. Similar to the False Claims Act, the
of 1986         PFCRA mandates civil monetary penalties of up to $5,000 per false claim or
                statement and up to twice the amount claimed in lieu of damages, for any
                person who makes, presents or submits, or causes to be made, presented or
                submitted, a claim that the person knows or has reason to know is false,
                fictitious, or fraudulent.


Detecting and   Wal-Mart has an established health care compliance program that includes
Preventing      regular education for its Associates, an employee hotline, written policies and
Fraud, Waste    procedures, and regular audits and reviews. Wal-Mart’s compliance procedures
and Abuse       located on the Compliance Site on the WIRE specifically address Wal-Mart’s
                ongoing efforts to detect and prevent fraud, waste and abuse in federal and state
                health care programs.

Open Door       The Open Door Communication Policy (PD-27) states that “All Associates may
Policy          have Open Door discussions concerning all matters pertaining to Wal-Mart.”
                The Open Door is intended to be used as a forum for suggestions, observations,
                problems, or concerns regarding the Company or Associates, to the attention of
                any supervisor or salaried member of management. Additionally, the policy
                states that “Wal-Mart will take no adverse action against any Associate based
                solely on the Associate’s participation or lack of participation in any Open
                 Door activity.”

                 In addition, Pharmacy has established several ways in which an Associate can
                 raise a concern, including:
                     • through the traditional Open Door, by contacting your Supervisor or
                         Member of Management,
                     • by phone: Pharmacy Compliance Hotline (1-800-530-9923) or the
                         Ethics Hotline (1-800-WMETHIC), anonymous reporting is possible
                         using these hotline numbers, or
                     • by email (RxComply@email.wal-mart.com)
                 Any of these disclosure methods are acceptable. For more information on the
                 Confidential Disclosure Program, see POM 1709.

Whistleblower In accordance with federal law and most state laws, an employee whistleblower
Protections   cannot be discharged, demoted, suspended, threatened, harassed or
              discriminated against by his or her employer based on lawful acts done by the
              employee in furtherance of an action under the state or federal FCAs. Wal-
              Mart will not retaliate against employees who, in good faith, raise legal and/or
              compliance concerns. For additional information on Wal-Mart’s policies and
              procedures regarding non-retaliation, see the Pharmacy Code of Conduct.

State FCA        Many states have false claims acts that mirror or are very similar to the Federal
Laws             FCA and include provisions addressing whistleblower protections, as well as
                 penalties and sanctions. Even in those states that have not yet enacted a
                 specific false claims act, other laws are available, including false statement
                 laws, wire fraud and mail fraud laws, which may be used to prosecute health
                 care fraud involving false claims. More detailed information on the state laws
                 is available on the following pages.




Arkansas Supplement
The Arkansas FCA is referred to as the “Arkansas Medicaid Fraud False Claims Act.” The
Arkansas FCA applies to claims made in conjunction with the Arkansas Medicaid Program.
Actions and events that trigger the penalties under the Arkansas FCA are similar to those under
the federal FCA; however, there are some noted difference. Specifically, in accordance with the
Arkansas FCA there is liability for any person who engages in the following:
    • Knowing makes or causes to be made any false statement or representation of a material
        fact in any application for any benefit or payment under the Arkansas Medicaid program
        or in determining rights to a benefit or payment under the program;
    • Having knowledge of the occurrence of any event affecting his or her initial or continued
        right to any benefit or payment or the initial or continued right to any benefit or payment
        of any other individual in whose behalf he or she has applied for or is receiving a benefit
        or payment knowingly conceals or fails to disclose that event with an intent fraudulently
        to secure the benefit or payment either in a greater amount or quantity than is due or
        when no benefit or payment is authorized;
    • Having made an application to receive any benefit or payment for the use and benefit of
        another and having received it, knowingly converts the benefit or payment or any part
        thereof to a use other than for the use and benefit of the other person;
    • Knowingly presents or causes to be presented a claim for a physician’s service for which
        payment may be made under the program and knows that the individual who furnished
        the service was not licensed as a physician;
    • Knowingly solicits or receives any remuneration or knowingly offers or pays any
        remuneration, including any kickback, bribe or rebate, directly or indirectly, overtly or
        covertly, in cash or in kind:
            o In return for referring an individual to a person for the furnishing or arranging for
                the furnishing of any item or service for which payment may be made in whole or
                in part under the program; or
            o In return for purchasing, leasing, ordering, or arranging for or recommending
                purchasing, leasing, or ordering any good, or furnishing any service or item for
                which payment may be made in whole or in part under the program;
    • Knowingly makes or causes to be made or induces or seeks to induce the making of any
        false statement or representation of a material fact with respect to information required
        pursuant to applicable federal and state laws, rules, regulations, and provider agreements;
    • Knowingly charges for any service provided to a patient under the program money or
        other consideration at a rate in excess of the rates established by the state;
    • Knowingly makes or causes to be made any false statement or representation of a
        material fact in any application for benefits of for payment in violation of the rules,
        regulations, and provider agreements used by the program or its fiscal agents; or
    • Knowingly participates directly or indirectly, in the Arkansas Medicaid program after it
        (or one of the provider’s employees or independent contractors/consultants) pled guilty or
        nolo contendere to or had been found guilty of a charge of Medicaid fraud, theft of public
        benefits, or abuse of adults.

A civil action may not be brought more than five (5) years after the date on which the violation
has occurred. There is no private right of action under the Arkansas FCA; however, individuals
who provide relevant and applicable information are eligible to receive a monetary reward for
the information.

In addition to the Arkansas FCA, Arkansas has a number of other statutes aimed at preventing
fraud for many of Arkansas’ other agencies and departments. Like the Arkansas FCA and the
federal FCA, these laws also prohibit filing false or fraudulent documentation in an effort to
improperly receive compensation from the State.

The Arkansas FCA does not have an explicit whistleblower protection provision.

Ark. Stat. § 20-77-901 et. seq.

Arizona Supplement

In addition to the items listed in POM 1711, the False Claims Act (31 U.S.C. §3729) also
imposes liability on persons or corporations that knowingly use, or cause to be used, a false
record or statement to conceal, avoid, or decrease an obligation to pay money or transmit
property to the Federal Government.

The FCA covers fraud involving any federally funded contract or program, with the exception of
tax fraud.

Under the FCA, an individual can file a qui tam lawsuit which is a civil lawsuit filed by the
individual on behalf of the government. The individual can receive an award only if the
government recovers money from the defendant. The amount of the award is a percentage of the
total recovery from the defendant based on the extent to which the individual substantially
contributed to the prosecution of the action.

In addition to the FCA, Arizona has a number of other statutes aimed at preventing fraud and
abuse for many of Arizona’s agencies and departments. These laws prohibit filing false and
fraudulent claims or documentation in an effort to improperly receive compensation from the
state.

31 U.S.C. §3729, A.R.S. §13-1802, A.R.S. §13-2002, A.R.S. §13-2310, A.R.S. §13-2311, and
A.R.S. §36-2918

California Supplement

California has a state FCA that is very similar to the federal FCA. Actions and events that
trigger penalties under the California FCA are akin to those that trigger penalties under the
federal FCA. However, under the California FCA, a person or entity may also be liable if he or
she is the beneficiary of an inadvertent submission of a false claim to the state, subsequently
discovered that the claim is false, and fails to disclose the false claim to the state within a
reasonable time after discovery of the false claim. The California FCA also differs from the
federal FCA in that it does not apply to any claim of less than $500 in value or claims involving
workers’ compensation, records or statements made under the Revenue and Taxation Code, or
claims against public entities and Associates.

In addition to the FCA, California has a number of other false claims statutes aimed at
preventing fraud and abuse for many of California’s agencies and departments, including Medi-
Cal, the California Medicaid program. Like the federal and California FCAs, these laws also
prohibit filing false or fraudulent claims or documentation in an effort to improperly receive
compensation from the State.

Like the Federal FCA, the whistleblower provisions contained in the California FCA prevent the
Company from preventing or retaliating against Associates who report false claims. To note, an
Associate is not protected if his or her participation in conduct directly or indirectly resulted in a
false claim being submitted to the state or political subdivision unless:
    • The Associate voluntarily disclosed information to a government law enforcement
        agency or acted in furtherance of a false claims action, including investigation for,
        initiation of, testimony for, or assistance in an action filed or to be filed; and
    • The Associate has been harassed threatened with termination or demotion, or otherwise
        coerced by the Company or a salaried member or management into engaging in the
        fraudulent activity in the first place.

Ca. Govt. Code §§ 12650-12656; Ca. Welf. & Inst. Code §§ 14107 and 14123.2

District of Columbia Supplement

The District of Columbia (D.C.) has a local FCA that is very similar to the federal FCA. Actions
and events that trigger penalties under the D.C. FCA are the same as those that trigger penalties
under the federal FCA. However, the D.C. FCA limits its prohibition to “false” versus “false and
fraudulent” claims and statements. Additionally, the D.C. FCA does not apply to claims
involving worker’s compensation, unemployment compensation or claims relating to certain of
the District’s tax laws. The D.C. FCA also has whistleblower provisions substantially similar to
the federal FCA provisions, which prohibit the Company from retaliating against Associates who
report potentially false claims.

In addition to the D.C. FCA, D.C. has a number of other false claims statutes aimed at preventing
fraud and abuse for many of D.C.’s agencies and departments, including the D.C. Medicaid
program. Like the Acts, these laws also prohibit filing false or fraudulent claims or
documentation in an effort to improperly receive compensation from the state.

D.C. has established an Antifraud Fund that consists of criminal fines, civil penalties, and
damages collected in cases brought pursuant to the D.C. FCA, other than funds awarded to a
cooperator or for restitution to a particular agency in the amount of the actual loss to that agency.
Such funds (with the exception of amounts for an award to a cooperator or restitution to the
program) shall be available for use by the Office of Corporation Counsel to carry out
enforcement of the D.C. FCA, including all costs reasonably related to prosecuting cases and
conducting investigations
D.C. Code §§2-308.13 to 2-308.21

Delaware Supplement

Delaware has a state FCA that is nearly identical to the federal FCA. Like the federal FCA, the
Delaware FCA prohibits the knowing submission of false or fraudulent claims to the state
government. Actions and events that trigger penalties under the Delaware FCA are the same as
those that trigger penalties under the federal FCA.

In addition to the Delaware FCA, Delaware has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Delaware’s agencies and departments, including the
Delaware Medicaid Program. Like the federal FCA and the Delaware FCA, these laws also
prohibit filing false or fraudulent claims or documentation in an effort to improperly receive
compensation from the State.

The Delaware FCA also has whistleblower specific provisions that prohibit the Company from
retaliating against Associates who report potentially false claims. These provisions are very
similar to those contained in the federal FCA.

6 Del. Code Ann. §§1201 et. seq. (2000)

Florida Supplement

Florida has a state FCA that is very similar to the federal FCA. Actions and events that trigger
penalties under the Florida FCA are akin to those that trigger penalties under the federal FCA. In
addition to the Florida FCA, Florida has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Florida’s agencies and departments, including the
Florida Medicaid Program. Like the federal FCA, and the Florida FCA, these laws also prohibit
filing false or fraudulent claims or documentation in an effort to improperly receive
compensation from the State. Additionally, Florida also has a number of state laws prohibiting
illegal referral relationships (e.g., kickbacks).

Although the majority of the Florida FCA reflects the provisions contained in the federal FCA,
there are a few differences. Such differences include a different statute of limitations. In
accordance with the Florida FCA, a civil action may not be brought more than 5 years after the
date on which it was committed or more than 2 years after the date when facts material to the
right of action are known or should have been known, but in no instance more than 7 years after
the date on which the violation is committed, whichever occurs last.

The civil penalties for violation of the Florida FCA are not less than $5,500 and not more than
$11,000. In addition, penalties of up to three times the amount of damages can be recovered.

The Florida FCA also has a whistleblower provision that prohibits the Company from retaliating
against Associates who report potentially false claims.
Fla. Stat. §§ 68.081, et seq.; Fla. Stat. § 112.3187; Fla. Stat. §409.920, 409.9201, 409.913,
775.082, 812.035; Fla. Stat. §§ 414.39, 817.155 and 837.06; and Fla. Admin. Code Ann. 59G-
9.070.

Georgia Supplement

Georgia has a state FCA that is very similar to the federal FCA. The actions and events that
trigger penalties under the Georgia FCA are substantially similar to those that trigger penalties
under the federal FCA. However, under the Georgia FCA, the liability is limited to only include
false claims submitted to or paid by the Georgia Medicaid Program.

The Georgia FCA, like the federal FCA, also has a whistleblower provision that prohibits the
Company from retaliating against Associates who report potentially false claims.

O.C.G.A §49-4-168 through §49-4-168.6.

Hawaii Supplement

Hawaii has a state FCA that is very similar to the federal FCA. Actions and events that trigger
penalties under the Hawaii FCA are substantially similar to those that trigger penalties under the
federal FCA. However, under the Hawaii FCA, a person or entity may also be liable if her or she
is a beneficiary of an inadvertent submission of a false claim to the state, subsequently discovers
that the claim is false, and fails to disclose the false claim to the state within a reasonable time
after discovery of the false claim. Additionally, the Hawaii FCA does not apply to any claim of
less than $5,000.

In addition to the Hawaii FCA, Hawaii has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Hawaii’s agencies and departments, including the
Hawaii Medicaid Program. Like the federal FCA and the Hawaii FCA, these laws also prohibit
filing false or fraudulent claims or documentation in an effort to improperly receive
compensation from the State.

Hawaii protects Associate whistleblowers through its “Whistleblower Protection Act.” The Act
prohibits the Company from retaliating against Associates who report potential or suspected
violation of law.

Haw. Rev. Stat §§ 661-21 to 661-29; Haw. Rev. Stat. §§46-171 to 46-179; Haw. Rev. Stat.
§§378-61 to 378-69,
Illinois Supplement

The Illinois FCA is also known as the Illinois Whistleblower Reward and Protection Act. The
Illinois FCA is very similar to the federal FCA. Actions and events that trigger penalties under
the Illinois FCA are substantially similar to those that trigger penalties under the federal FCA.
However, in addition to applying to statements and claims presented or provided to the State, the
Illinois FCA also applies to claims presented to the Illinois National Guard. The Illinois FCA
does not apply to claims, records, or statements made under the Illinois Income Tax Act.

In addition to the Illinois FCA, Illinois has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Illinois’ agencies and departments, including the Illinois
Medicaid Program. Like the federal FCA and the Illinois FCA, these laws also prohibit filing
false or fraudulent claims or documentation in an effort to improperly receive compensation
from the state.

The Illinois FCA has whistleblower provisions that prohibit the Company from retaliating
against Associates who report potential false claims. Additionally, Illinois maintains
Whistleblower Reward and Protection Funds as a special fund in the State Treasury. All
proceeds of an action or settlement of a claim brought under the Illinois FCA shall be deposited
in the fund. After one-sixth of the monies are paid to the Attorney General and one-sixth of the
monies are paid to the Department of State Police for State law enforcement purposes, the
remaining two-thirds are used for payment of awards to qui tam plaintiffs, attorneys’ fees and
expenses, and as otherwise specified in the Act.

Ill. Comp. Stat. §§ 175/1 to 175/8

Indiana Supplement

Indiana has a state FCA that is very similar to the federal FCA. Actions and events that trigger
penalties under the Indiana FCA are substantially similar to those that trigger penalties under the
federal FCA. Like the federal FCA, the Indiana FCA prohibits filing false or fraudulent claims
or documentation in an effort to improperly receive compensation from the state or any agency
of state government (the term does not apply to a political subdivision).

In addition to the Indiana FCA, Indiana has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Indiana’s agencies and departments, including the
Indiana Medicaid Program. Like the federal FCA and Indiana FCA, these laws also prohibit
filing false or fraudulent claims or documentation in an effort to improperly receive
compensation from the State.

The Indiana False Claims Act also has whistleblower provisions that are akin to the federal FCA
provisions, which prohibit the Company from retaliating against Associates who report
potentially false claims and offers substantial penalties against those employers that do.

Ind. Code §§ 5-11-5.5-1 to 5-11-5.5-18
Louisiana Supplement

Louisiana has a state FCA that is very similar to the federal FCA. The Louisiana FCA is also
known as the “Louisiana Medical Assistance Programs Integrity Law” and only applies to claims
made to the Louisiana Medical Assistance Program. This law contains many of the same
provisions of the federal FCA. Actions and events that trigger penalties under the Louisiana
FCA are akin to those that trigger penalties under the federal FCA. However, in addition to the
provision contained in the federal FCA, under the Louisiana FCA, a person may also be liable if
he or she knowingly submits a claim for goods, services, or supplies that are medically
unnecessary or of a substandard quality or quantity.

In addition to the Louisiana FCA, Louisiana has a number of other false claims statutes (civil and
criminal) aimed at preventing fraud and abuse for many of Louisiana’s other agencies and
departments. Like the Louisiana FCA and the federal FCA, these laws also prohibit filing false
or fraudulent claims or documentation in an effort to improperly receive compensation from the
State.

The Louisiana FCA also has whistleblower provisions that are substantially similar to the federal
provisions, which prohibit the Company from retaliating against Associates who report
potentially false claims.

La. Rev. Stat. Ann. §§ 46:438.3 to 438.8; La. Rev. Stat. Ann. §§ 46:439.1 to 439.4; La Rev. Stat.
Ann. § 46.440.3; La. Rev. Stat. Ann. § 14:70.1

Massachusetts Supplement

Massachusetts has a state FCA that is very similar to the federal FCA. Actions and events that
trigger penalties under the Massachusetts FCA are substantially similar to those that trigger
penalties under the federal FCA. However, under the Massachusetts FCA, a person or entity
may also be liable if he or she is a beneficiary of an inadvertent submission of a false claim to the
state, subsequently discovers that the claim is false, and fails to disclose the false claim to the
state within a reasonable time after discovery of the false claim. Additionally, the Massachusetts
FCA does not apply to claims, records or statements made or presented to establish, limit,
reduce, or evade liability for the payment of tax to the Commonwealth, or any other
governmental entity.

In addition, to the Massachusetts FCA, Massachusetts has a number of other statutes aimed at
preventing fraud and abuse for many of Massachusetts’s agencies and departments, including the
Massachusetts Medicaid program. Like the Massachusetts FCA and the federal FCA, these laws
also prohibit filing false or fraudulent claims or documentation, in an effort to improperly receive
compensation from the State.

The Massachusetts FCA also has whistleblower provisions that are substantially similar to the
federal FCA provisions, which prohibit the Company from preventing or retaliating against
Associates who report potentially false claims.
Ma. Gen. Laws Chp. 12 §§ 5A-50 et. seq.

Michigan Supplement

The Michigan FCA is also referred to as the “Medicaid False Claim Act” and applies only to
claims and statements made to the Michigan Medicaid Program. This law contains many
comparable provisions as the federal FCA and the actions and event that trigger penalties under
the Michigan FCA are akin to those that trigger penalties under the federal FCA. Because the
Michigan law focuses on claims made to the Medicaid program, there are additional provisions
addressing the variety of claims and statements regarding rights to benefits. Violators of the
Michigan FCA are potentially subject to both criminal and civil penalties.

In addition to the Michigan FCA, Michigan has a number of other false claims statutes (civil and
criminal) aimed at preventing fraud and abuse for many of Michigan’s other agencies and
departments. Like the Michigan FCA and the federal FCA, these laws also prohibit filing false
or fraudulent claims or documentation in an effort to improperly receive compensation from the
State.

The Michigan FCA also has whistleblower provisions that prohibit an entity from adopting or
enforcing a rule, regulation or policy preventing or retaliating against Associates who report
potentially false claims. This prohibition does not apply to an employment action against an
Associate whom the court finds brought a frivolous claims, or participated, planned or initiated
the conduct upon which the action is brought.

Mich. Law. Ann §§ 400.601 to 400.611

Missouri Supplement

Missouri has a state FCA that is very similar to the federal FCA. Actions and events that trigger
penalties under the Missouri FCA are substantially similar to those that trigger penalties under
the federal FCA. Although the majority of the Missouri FCA reflects the provisions contained in
the federal FCA, there is an additional provision that requires the individual or entity to retain
documentation for five (5) years that show services provided, claims submitted and payments
requested. If an individual or entity destroys or conceals documents that are less than five (5)
years old, they could be charged with a Class A misdemeanor.

The Missouri FCA also has a whistleblower provision that prohibits the Company from
retaliating against Associates who report potentially false claims.

Montana Supplement

Montana has a state FCA that is very similar to the federal FCA. Actions and events that trigger
penalties under the Montana FCA are substantially similar to those that trigger penalties under
the federal FCA. However, under the Montana FCA, a person or entity may also be liable if he
or she is a beneficiary of an inadvertent submission of a false claim to the state, subsequently
discovers that the claim is false, and fails to disclose the false claim to the state within a
reasonable time after discovery of the false claim. Additionally, the Montana FCA does not
apply to any claim of less than $500.

In addition to the Montana FCA, Montana has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Montana’s agencies and departments, including the
Montana Medicaid Program. Like the Montana FCA and the federal FCA, these laws also
prohibit filing false or fraudulent claims or documentation in an effort to improperly receive
compensation from the State.

The Montana False Claims Act also has whistleblower provisions that prohibit a governmental
entity from adopting or enforcing a rule, regulation or policy preventing or retaliating against
Associates who report potentially false claims.

Mt. St. §§ 17-8-01 et. seq.

North Carolina Supplement

North Carolina has a state FCA that is very similar to the federal FCA. The North Carolina FCA
is known as the “Medical Assistance Provider FCA” and applies to claims made in conjunction
with the North Carolina Medicaid Program. Actions and events that trigger penalties under the
North Carolina FCA are substantially similar to those that trigger penalties under the federal
FCA. The North Carolina FCA contains an explicit statement that specifically notes that the
North Carolina law was intended to be interpreted and construed as consistent to the federal FCA
and any subsequent amendment to the federal FCA.

In addition to the North Carolina FCA, North Carolina has a number of other false claims
statutes aimed at preventing fraud and abuse for many of North Carolina’s other agencies and
departments. Like the North Carolina FCA and federal FCA, these laws also prohibit filing false
or fraudulent claims or documentation in an effort to improperly receive compensation from the
State.

The North Carolina FCA also has a whistleblower provision that prohibits the Company from
retaliating against Associates who report potentially false claims.

N.C. Stat. § 108A-70.10 to 70.16

New Hampshire Supplement

New Hampshire has a state FCA that is very similar to the federal FCA. In fact, actions and
events that trigger penalties under the New Hampshire FCA are substantially similar to those that
trigger penalties under the federal FCA. The New Hampshire FCA applies to claims submitted
to the New Hampshire Department of Health & Human Services, the state department that
administers the New Hampshire Medicaid Program. In addition to the actions and events
contained in the federal FCA, under the New Hampshire FCA, a person or entity may also be
liable if he or she is a beneficiary of an inadvertent submission of a false claim to the state,
subsequently discovers that the claim is false, and fails to disclose the false claim to the state
within a reasonable time after discovery of the false claim. Additionally, the New Hampshire
FCA does not apply to any one or more claims submitted of less than $5,000.

The New Hampshire FCA defines “fraud” differently than the federal FCA. Under the New
Hampshire FCA, fraud is defined as the intentional deception or misrepresentation made by a
person with the knowledge that the deception could result in some unauthorized benefit to
himself or some other person. It includes any act that constitutes fraud under the New
Hampshire criminal code.

In addition to the New Hampshire FCA, New Hampshire has a number of other false claims
statutes aimed at preventing fraud and abuse for many of New Hampshire’s agencies and
departments, including the New Hampshire Medicaid Program. Like the New Hampshire FCA
and the federal FCA, these laws also prohibit filing false or fraudulent claims or documentation
in an effort to improperly receive compensation from the State.

The New Hampshire False Claims Act does not include explicit whistleblower protection
provisions. However, New Hampshire does have a Whistleblowers’ Protection Act that does
protect Associates who report, in good faith, a suspected violation of law.

N.H. Rev. Stat. Ann. §§ 167-61-a to 167-61-e; N.H. Rev. Stat. Ann. § 275-E:2

New Jersey Supplement

New Jersey has a state FCA that is very similar to the federal FCA. The actions and events that
trigger penalties under the New Jersey FCA are the same as those that trigger penalties under the
federal FCA.

The New Jersey state FCA allows private individuals in New Jersey to bring an action under the
FCA alone or by working with the New Jersey Attorney General.

The New Jersey FCA, like the federal FCA, also has a whistleblower provision that prohibits the
Company from retaliating against Associates who report potentially false claims.

New Jersey also has state laws that provide for criminal penalties for individuals and entities that
engage in fraud. Including:
   • Fraudulent receipt of payments or benefits: fine of up to $10,000, imprisonment of up to
       3 years, or both;
   • False claims, statements or omissions, or conversion of benefits or payments: fine of up
       to $10,000, imprisonment for up to 3 years, or both;
   • Kickbacks, rebates and bribes: fine of up to $10,000, imprisonment for up to 3 years, or
       both;
   • False statements or representations about conditions or operations of an institution or
       facility to qualify for payments: fine of up to $3,000, or imprisonment for up to 1 year,
       or both
The New Jersey Health Care Claims Fraud Act provides the following criminal penalties for
health care claims fraud, including submission of false claims to programs funded in whole or in
part with state funds:
    • A practitioner who knowingly commits health care claims fraud in the course of
        providing professional services is guilty of a crime of the second degree, and is subject to
        a fine of up to 5 times the monetary benefits obtained or sought to be obtained and to
        permanent forfeiture of his license;
    • A practitioner who recklessly commits health care claims fraud in the course of providing
        professional services is guilty of a crime of the third degree, and is subject to a fine of up
        to 5 times the pecuniary benefit obtained or sought to be obtained and the suspension of
        his license for up to 1 year;
    • A person who is not a practitioner subject to the above (for example, someone who is not
        licensed, registered or certified by an appropriate State agency as a health care
        professional) is guilty of a crime of the third degree if that person knowingly commits
        health care fraud. Such a person is guilty of a crime of the second degree if that person
        knowingly commits 5 or more acts of health care claims fraud, and the aggregate
        monetary benefit obtained or sought to be obtained is at least $1,000. In addition to all
        other criminal penalties allowed by law, such a person may be subject to a fine of up to 5
        times the monetary benefit obtained or sought to be obtained;
    • A person who is not a practitioner subject to the first two paragraphs above is guilty of a
        crime of the fourth degree if that person recklessly commits health care claims fraud. In
        addition to all other criminal penalties allowed by law, such a person may be subject to a
        fine of up to 5 times the monetary benefit obtained or sought to be obtained.

Similar to the federal FCA, New Jersey can impose the following civil sanctions for individuals
and entities engaging in fraud:
   • Unintentional violations: recovery of overpayments and interest;
   • Intentional violation: recovery of overpayments, interest, up to triple damages, and up to
       $2,000 for each false claims
   • Exclusion of an individual or entity from participation in all health care programs funded
       in whole or in part by the New Jersey Division of Medical Assistance and Health
       Services.


N.J.S. 30:4D-17(a)-(d); N.J.S. 30:4D-7.h; N.J.S. 30:4D-17(e)-(i); N.J.S. 30:4D-17.1a; N.J.S.
2C:21-4.2 & 4.3; N.J.S. 2C:51-5; N.J.S. 2A:32C-1 to N.J.S. 2A:32C-17; N.J.S. 34:19-1, et seq.

New Mexico Supplement

New Mexico has a state FCA that is very similar to the federal FCA. The New Mexico FCA
applies to claims made in conjunction with the New Mexico Medicaid Program. Although the
actions and events that trigger the penalties under the New Mexico FCA are similar to those
under the federal FCA, there are some noted differences. Specifically, in accordance with the
New Mexico FCA, FCA liability exists for any person who engages in the following:
   •   Presents, or causes to be presented, to the state a claim for payment under the Medicaid
       program knowing that such claim is false or fraudulent;
   •   Presents, or causes to be presented, to the state a claim for payment under the Medicaid
       program knowing that the person receiving a Medicaid benefit or payment is not
       authorized or is not eligible for a benefit under the Medicaid program;
   •   Makes or causes to be made or used a record or statement to obtain a false or fraudulent
       claim under the Medicaid program paid for or approved by the state knowing such record
       or statement is false;
   •   Conspires to defraud the state by getting a claim allowed or paid under the Medicaid
       program knowing that such claim is false or fraudulent;
   •   Makes, uses or causes to be made or used a record or statement to conceal, avoid or
       decrease an obligation to pay or transmit money or property to the state, relative to the
       Medicaid program, knowing that such record or statement is false;
   •   Knowingly applies for and receives a benefit or payment on behalf of another person,
       except pursuant to a lawful assignment of benefits, under the Medicaid program and uses
       that benefit or payment to his own personal use;
   •   Knowingly makes a false statement or misrepresentation of material fact concerning the
       conditions or operation of a health care facility in order that the facility may qualify for
       certification or recertification required by the Medicaid program; or
   •   Knowingly makes a claim under the Medicaid program for a service or product that was
       not provided.

In addition to the New Mexico FCA, New Mexico has a number of statutes aimed at preventing
fraud and abuse for many of New Mexico’s other agencies and departments. Like the New
Mexico FCA and federal FCA, these laws prohibit filing false or fraudulent claims or
documentation in an effort to improperly receive compensation from the State.

Like the federal FCA, the New Mexico FCA also had a whistleblower provision that prohibits
the Company from retaliating against Associates who report potentially false claims.

N.M. Stat. Ann. §§ 27-14-1 to 27-14-15

Nevada Supplement

Nevada has a state FCA that is very similar to the federal FCA and applies to any claims and
statements made to the state or local governments. Those actions and events that trigger
penalties under the federal FCA are the same as those that trigger penalties under the Nevada
FCA. Additionally, under the Nevada FCA, a person may also be liable if he or she is a
beneficiary of an inadvertent submission of a false claim to the state, subsequently discovers that
the claim is false, and fails to disclose the false claim to the state within a reasonable time after
discovery of the false claim.

In addition to the Nevada FCA, Nevada has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Nevada’s agencies and departments, including the
Nevada Medicaid Program. Like the Nevada and Federal FCAs, these laws also prohibit filing
false or fraudulent claims or documentation in an effort to improperly receive compensation
from the State.

The Nevada False Claims Act also has a whistleblower provision that is akin to the federal FCA
provisions and which prohibits the Company from retaliating against Associates who report
potentially false claims.

Nev. Rev. Stat. §§ 357.010, et.seq.; Nev. Rev. §§ 422.410, 422.540 & 422.580

New York Supplement

New York has a state FCA that is very similar to the federal FCA. The actions and events that
trigger penalties under the New York FCA are substantially similar to those that trigger penalties
under the federal FCA. However, under the New York FCA, an individual who uses a false
record or statement to avoid or decrease an obligation to pay money or property to the state or
local government, may be assessed a civil penalty to be paid to the state and local government.

The New York FCA, like the federal FCA, also has a whistleblower provision that prohibits the
Company from retaliating against Associates who report potentially false claims.

NY CLS St. Fin. §188-193.

Oklahoma Supplement

Oklahoma has a state FCA that is very similar to the federal FCA. The actions and events that
trigger penalties under the Oklahoma FCA are substantially similar to those that trigger penalties
under the federal FCA.

A significant difference between the federal FCA and Oklahoma FCA is that if an individual or
entity is imposed a penalty under the federal FCA then that individual or entity will not be
imposed an additional penalty under the Oklahoma FCA.

63 Okla. Stat. § 5053.1 – § 5053.7.

Pennsylvania Supplement

Pennsylvania has a number of false claims statutes aimed at preventing fraud and abuse. The
actions and events that trigger penalties under the Pennsylvania fraud and abuse laws are
substantially similar to those that trigger penalties under the federal FCA. However, under the
Pennsylvania fraud and abuse laws, a person or entity may also be liable if he or she presents a
claim for payment under the Medicaid program for a product or service that was medically
unnecessary. A person or entity will also be liable if they solicit, receive, offer or pay a kickback
or bribe for referral of a patient to receive services that are paid for by the medical assistance
program. Additionally, it is unlawful to dispense or provide a service or item to a patient without
making a reasonable effort to ascertain by verification of a current medical assistance
identification card, that the person or patient is, in fact, a recipient who is eligible on the date of
service and without another available medical resource.

Penalties for violation of the Pennsylvania fraud and abuse laws range from a third degree
misdemeanor to a second degree felony. In addition, fines of up to $25,000 and treble damages
may be imposed.

Pennsylvania also has a whistleblower law that prohibits the Company from retaliating against
Associates who report potentially false claims and prohibits the Company from discriminating
against employees who cooperate with an investigation or inquiry regarding potential
wrongdoing or waste by the Company.

62 P.S. §§1407-1408; 43 P.S. §§1422-1428.

Tennessee Supplement

Tennessee has a state FCA that is very similar to the federal FCA. The Tennessee FCA applies
to claims submitted to the State Medicaid Program, TennCare. In fact, the actions and events
that trigger penalties under the Tennessee FCA are the same as those that trigger penalties under
the federal FCA. However, under the Tennessee FCA, a person may also be liable if he or she is
a beneficiary of an inadvertent submission of a false claim, subsequently discovers that the claim
is false, and fails to disclose the false claim to the state within a reasonable time after discovery
of the false claim. Additionally, the Tennessee FCA does not apply to any claim of less than
$500 in value or claim involving worker’s compensation or relating to tax laws administered by
the Tennessee Department of Revenue.

In addition to the Tennessee FCA, Tennessee has a number of other false claims statutes aimed
at preventing fraud and abuse for many of Tennessee’s other agencies and departments. Like the
Tennessee FCA and the federal FCA, these laws also prohibit filing false or fraudulent claims or
documentation in an effort to improperly receive compensation from the State.

The Tennessee False Claims Act also has a whistleblower provision that prohibits the Company
from retaliating against Associates who report potentially false claims.

Tenn. Code Ann. §§ 4-18-101, et. seq.; Tenn. Code Ann. §§ 71-5-181, et. seq.; Tenn. Code Ann.
§ 71-5-2601.

Texas Supplement

Texas has a state FCA that is very similar to the federal FCA. The actions and events that trigger
penalties under the Texas FCA are substantially similar to those that trigger penalties under the
federal FCA. However, under the Texas FCA, a person or entity may also be liable if he or she
presents a claim for payment under the Medicaid program for a product or service that was
rendered by an unlicensed provider or that has not been approved by a healthcare practitioner. A
person or entity will also be liable if they solicit, receive, offer or pay a kickback or bribe for
referral of a patient to receive services that are paid for by the medical assistance program.
Violations of the Texas FCA range from a Class C misdemeanor to a first degree felony
depending on the amount of the false claim(s) submitted.

In addition to the Texas FCA, Texas has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Texas’s agencies and departments. Like the Texas FCA
and the federal FCA, these laws also prohibit filing false or fraudulent claims or documentation
in an effort to improperly received compensation from the State.

The Texas FCA, like the federal FCA, also has a whistleblower provision that prohibits the
Company from retaliating against Associates who report potentially false claims.

Tex. Hum. Res. Code Ann. § 32.039; Tex. Hum. Res. Code Ann. §§36.001-36.008; Tex. Hum.
Res. Code Ann. §§36.051-36.055.

Virginia Supplement

Virginia has a state FCA that is very similar to the federal FCA. Like the federal FCA, the
Virginia FCA prohibits the knowing submission of false or fraudulent claims to the state
government. In fact, actions and events that trigger penalties under the federal FCA are the same
as those that trigger penalties under the Virginia FCA.

In addition to the Virginia FCA, Virginia has a number of other false claims statutes aimed at
preventing fraud and abuse for many of Virginia’s agencies and departments, including the
Virginia Medicaid Program. Like the Virginia FCA and the federal FCA, these laws also
prohibit filing false or fraudulent claims or documentation in an effort to improperly receive
compensation from the State.

The Virginia FCA, like the federal FCA, also has a whistleblower provision that prohibits the
Company from retaliating against Associates who report potentially false claims.

Va. Code Ann. §§ 8.01-216.1, et.seq.; Va. Code Ann. §§ 18.2-498.3, 32.1-312 to 32.1-319, 32.1-
341, 32.1-349, 32.1-350 and 63.2-522.

Wisconsin Supplement

Wisconsin has a state FCA that is very similar to the federal FCA. The actions and events that
trigger penalties under the Wisconsin FCA are the same as those that trigger penalties under the
federal FCA.

The Wisconsin state FCA allows private individuals in Wisconsin to bring an action under the
FCA for the person and the state in the name of the state.

The Wisconsin FCA, like the federal FCA, also has a whistleblower provision that prohibits the
Company from retaliating against Associates who report potentially false claims.

121 Wis. Stats. 20.931
   Wal-Mart Stores, Inc.
    Pharmacy Division




Code of Conduct

     As revised December 5, 2007
As stated in the Wal-Mart Stores, Inc. Statement of Ethics (PD-10), when Sam Walton founded
Wal-Mart Stores, Inc. (“Wal-Mart”), he established the “Three Basic Beliefs” to which we
remain firmly committed:
    • Respect for the Individual
    • Service to our Customers
    • Strive for Excellence
The Three Basic Beliefs go hand in hand with the integrity and ethical conduct that is the
foundation of our business. The following Code of Conduct will reflect the same expectations
for the Pharmacy Division.

                        Guiding Compliance Principles

As Pharmacy Associates, we must:
   • Follow the law at all times;
   • Be honest and fair;
   • Never manipulate, misrepresent, abuse or conceal information;
   • Avoid conflicts of interest between work and personal affairs;
   • Never discriminate against anyone;
   • Never act unethically - even if someone else instructs you to do so;
   • Never ask someone to act unethically;
   • Seek assistance if you have questions about this Code of Conduct or if
     you face an ethical or compliance dilemma;
   • Cooperate with any investigation of a possible compliance violation; and
   • Report compliance violations or suspected violations.


This Code of Conduct provides an introduction to the compliance responsibilities of all
Pharmacy Associates, along with an overview of certain important procedures. This Code of
Conduct is an important part of employment with Wal-Mart, but is not intended to create an
express or implied contract of employment in and of itself.
                                 Table of Contents
Introduction

When You Have a Compliance Concern

Our Responsibilities

Key Laws Pertaining to the Pharmacy Division

Non-Retaliation

Disciplinary Guideline

Compliance Contacts

                             Related Pharmacy Procedures:


     The following documents and Pharmacy Procedures are referred to in this Code of
     Conduct and are available on the “Wire” or may be obtained from your supervisor:

     Statement of Ethics – PD 10
     Coaching – PD 30
     HIPAA – PD 59
     Billing - POM 1701
     Partial Fill Procedure - POM 1702
     Forged or Altered Prescriptions - POM 1703
     Partial Fill Program - POM 1704
     Return To Stock Program - POM 1705
     Pharmacy Corrective Action Procedure - POM 1707
     Credit Balances and Overpayments – POM 1708
     Confidential Disclosure Program – POM 1709
     HIPAA – POM Section 1600
     Billing Practices and Fraud & Abuse Prevention – POM 1711

     Certain Federal Rules or Regulations may correspond to the procedures in the list
     above. If a state law is more stringent, or conflicts with the listed procedures, follow
     the state or local rules and regulations. Nevertheless, all conflicts are to be resolved
     in favor of this Code of Conduct to the extent permissible under local law.
Introduction
This Pharmacy Code of Conduct (“Code”) introduces specific principles covering key
compliance issues. It will identify risk areas that you may encounter in your job and help you
determine what to do if you have a question or concern. The Guiding Compliance Principles at
the beginning of this Code provide you with a general guide for appropriate business conduct.
However, no Code or statement of compliance principles can spell out the proper conduct for
every situation. Ultimately, you must rely on your own judgment and sense of ethical behavior
to ensure that you are doing the “right thing.” Several Pharmacy procedures are summarized in
this Code. Each summary consists of an overview of the procedure and helpful hints for
handling situations that may arise. The procedures are found in greater detail on the “WIRE.”

     Who is Covered by the Code of Conduct
     This Code of Conduct applies to all Pharmacy Associates (Division 10).

     What Law Applies
     The Pharmacy Division (“Pharmacy”) is committed to the highest ethical standards in
     the conduct of our business as set forth in the Guiding Compliance Principles. The
     number of laws and regulations affecting Pharmacy increases and becomes more complex
     each year. As necessary, this Code will be modified to conform to changes in laws.

     Associate Responsibility
     The following basic obligations apply to all Associates:
        • Where there is a conflict between compliance and business objectives, compliance
            must always come first.
        • Follow the law! If you see any Associate violating the law, or if you are asked to
            do something that does or you believe may violate the law, report it immediately.
            Seek assistance from your supervisor, Pharmacy Compliance Office, or other Wal-
            Mart resources if you have questions about the Code or other procedures.
        • Learn the policies and procedures that apply to your job. No one expects you to
            memorize every policy and procedure, but, you should have a basic understanding
            of issues covered by each policy and procedure, and you should learn which
            policies and procedures apply to your job.

     Wal-Mart prohibits any Associate from retaliating against anyone who in good faith
     raises or helps to resolve a compliance concern.

     Additional Responsibilities for Management Associates
     If you are a management Associate, you should monitor compliance. Supervision of
     compliance is as important as supervision of performance. You should do the following to
     ensure that our Pharmacy maintains the highest compliance standards:
         • Never cover up or ignore a compliance problem. Address compliance matters in a
             timely manner and seek guidance if necessary.
         • Never retaliate against anyone for raising a compliance issue, assisting in a
             compliance investigation or participating or assisting in any proceeding relating to
             an alleged violation of any applicable government regulations, laws or rules.




                                               1
When You Have a Compliance Concern
   One of the most important responsibilities Associates have is the obligation to raise a
   concern about a possible violation of Wal-Mart policy or the law. If you are reluctant to
   raise these concerns, you should remember that you can cause harm to our Company and
   our fellow Associates if you remain silent when you have a compliance or policy concern.
   In fact, all Associates are required to report any known or suspected violations of the law,
   applicable regulations or this Code of Conduct or any other Wal-Mart policy.

   How to Raise a Compliance Concern
   You may report compliance concerns or possible violations of this Code of Conduct or
   other Wal-Mart policies by any of the following methods:

      ! Use the Open Door. The Open Door is the most direct way to voice any concern
        to a supervisor. If you believe your immediate supervisor is involved in
        misconduct, report the misconduct to the next level of management believed not to
        be involved or use one of the other reporting channels described below.
                                               - or -
      ! Contact the Pharmacy Compliance Hotline. You may also call the confidential
        toll-free PHARMACY COMPLIANCE HOTLINE at 1-800-530-9923 or the
        Ethics Hotline at 1-800-WMETHIC (1-800-963-8442) to report potential instances
        of non-compliance.
                                              - or -
      ! Contact the Professional Services Compliance Office.
      Pharmacy Compliance Hotline         "      (800) 530-9923
        The Compliance Hotline allows you to report a violation on a confidential basis.
        If you would like, you may remain anonymous.

                 Professional Services             (479) 277-9022
                  Compliance Officer
                                            "
                                            7      (479) 273-1986
                                            #      RxComply@email.wal-mart.com
                                                   702 SW 8th Street
                                            $      Bentonville, AR 72716-0230


       No Associate who in good faith reports a suspected violation will be subject to
       retaliation for having made the report.




                                             2
Our Responsibilities
The Pharmacy Division is dedicated to providing the highest level of patient care. In
pursuing this mission, the Pharmacy Division expects all of its Associates to act
ethically and legally. This Code has been adopted to ensure these expectations are
understood and met. It applies to all Pharmacy Associates and Applicable
Contractors.

Be Honest and Ethical
    Particular care should be taken to ensure that all communication within the
    Pharmacy Division and to outside agencies is truthful, accurate and complete.
    No document may be altered for the purpose of misleading anyone. Every
    Associate is expected to adhere to highest ethical standards when he or she
    acts on behalf of the Pharmacy Division. Associates who are licensed or
    certified healthcare professionals are expected to adhere to the ethical
    standards established by their professional organizations.

Obey the Law
    There are many laws and regulations that govern the activities of the Pharmacy,
    particularly those relating to claims submission. Each Associate is responsible for
    compliance with federal and state laws and regulations and the Pharmacy policies
    and procedures related to their duties and responsibilities. Pharmacy has
    established Claims Submission Guidelines (available on the WIRE) that are designed
    to ensure accurate credit reversals and claims submission. Other procedures, such
    as “Compliance with §6032 of the Deficit Reduction Act”, which reviews our
    responsibilities under the False Claims Act, are also listed in the Pharmacy
    Compliance Section on the WIRE. If you are not certain what a procedure requires,
    you should ask for help. Guidance can be obtained from the Professional Services
    Compliance Officer at (479) 277-9022.

     When handling partially filled prescriptions, (i) Associates will inform Patients that
     less medication than the amount prescribed is actually provided in the delivery of
     the partially filled prescription, and (ii) instruct the Patient of the need to obtain an
     additional amount of the medication in order to comply with their physician’s care
     instructions. Claim submission for the partially filled prescription will be in
     accordance with POM 1704.


     The following discussion highlights some of the key “fraud and abuse” laws that
     impact the Pharmacy Division. As this is a highly complex area of law, the Code of
     Conduct cannot list all of the situations in which the federal and state false claims
     laws might apply. Pharmacy Associates must take special care in this area, and
     Associates must refer any questions regarding claims submission and preparation
     promptly to the Compliance Officer, who may refer the question to the Legal
     Department, if appropriate.
Key Laws Pertaining to the Pharmacy Division
False Claims Act
The Federal False Claims Act (31 U.S.C. §§3729-3733) (“FCA”) is the government’s
“primary tool for combating fraud” and imposes civil liability on persons or corporations
who, among other things:
   •   Knowingly present or cause to be presented a false or fraudulent claim for
       payment to the United States (or any program funded by the United States);
   •   Knowingly use a false record or statement to obtain payment on a false or
       fraudulent claim paid by the United States; or
   •   Engage in a conspiracy to defraud the United States to obtain allowance for or
       payment of a false or fraudulent claim.
The FCA defines “knowing” or “knowingly” as having actual knowledge of the falsity of
the claim, acting in deliberate ignorance of the truth or the falsity of the claim, or acting in
reckless disregard of the truth or falsity of the claim. Specific intent to defraud is not
required.
Penalties under the FCA are substantial. The law provides for liability of up to three (3)
times the amount of government damages. Also, anyone who violates the FCA is subject
to civil penalties in the range of $5,500 to $11,000 for each fraudulent claim. Punishment
for criminal conviction for false claims can include imprisonment and substantial fines.
False Claims Act violations may result in exclusion from participation in federal health
care programs.
The qui tam provisions of the FCA allow private individuals to bring a False Claims Act
lawsuit and retain a portion of the recovery obtained by the United States. Under the FCA,
Associates are protected from retaliation, including negative employment consequences,
by their Supervisors or other Members of Management stemming from reporting FCA
violations, participating in investigations, or filing an action with the court related to FCA
violations. Please review (POM 1711) for detailed information related to specific state
False Claims Acts and other relevant laws pertaining to penalties for false claims and
statements.
Examples of the types of actions that could violate the federal FCA and other laws
prohibiting false or fraudulent billing include:
   •   Billing for services, supplies or drugs not provided.
   •   Misrepresenting the diagnosis to justify the services or product furnished.
   •   Altering claim forms to obtain a higher payment amount.
   •   Engaging in a pattern of duplicate billing to obtain reimbursement to which the
       Pharmacy Division is not entitled.
   •   Knowingly and willfully making an offer, payment, solicitation or receiving a
       kickback, bribe or rebate.
   •   Misrepresenting the services rendered, amounts charged for services rendered,
       identity of the person receiving the services, dates of services, etc.
   •   Failing to follow the correct billing order when billing claims for Medicaid or
       Medicare (“payer of last resort”)
   •   Routinely waiving patient co-payments or deductibles without determining


                                            4
       financial ability to pay.
   •   Requesting or obtaining additional payments for covered services from the patient
       other than co-payments or deductibles.
   •   Misrepresenting dates, frequency, duration, or description of services rendered, or
       the identity of the services or the individual who rendered the services.
   •   Intentionally submitting incorrect, misleading or fraudulent information to any
       payor.
   •   Intentionally falsifying, destroying or withholding records relating to the billing
       and claims submission function.
   •   Knowingly making a false statement to conceal, avoid or decrease a refund
       obligation.
   •   Billing a state and collecting reimbursement for an amount that is greater than the
       ‘best price’ for a given medication.

In addition to the federal FCA, and the federal laws referenced below, the
Federal Program Fraud Civil Remedies Act also prohibits and penalizes the
submission of false claims and statements to Medicare and other federal
programs. Likewise, many states have enacted their own false claims laws
that are similar to the federal FCA. These state laws penalize anyone who
knowingly submits or causes to submit false or fraudulent claims to the
state or to its Medicaid program. To help prevent violations of these laws,
Wal-Mart Pharmacy has established policies and procedures that reinforce
our commitment to the highest ethical standards when submitting claims
for reimbursement. Specifically, Wal-Mart has adopted policies and
procedures on preventing and detecting waste, fraud and abuse. These are
summarized in this Code of Conduct and also are available on the WIRE.
Wal-Mart Pharmacy encourages Associates, vendors and contractors to
report suspected improper conduct by speaking directly with the Director
of Compliance or reporting, anonymously if they wish, through the
Compliance Hotline. In compliance with federal and state law and in
compliance with its own policies and procedures, Wal-Mart Pharmacy will
protect from retaliation any employee, vendor or contractor who in good
faith reports a suspected violation.


   Things to Remember!
       •   The FCA is the Government’s primary tool for combating fraud.
       •   Significant penalties for violating the FCA
       •   There will be no retaliation for individuals who in good faith raise FCA
           concerns.


False Statements Criminal Prohibition
Federal law also makes it a crime to knowingly and willfully make any materially false,
fictitious or fraudulent statement or representation to the United States (18 U.S.C. §1001).
Criminal fines may be imposed in addition to imprisonment of up to five years per
violation. There are also other criminal laws that can be used to prosecute the intentional
submission of false claims. (18 U.S.C. §287; 18 U.S.C. §1347)

Social Security Act
A number of provisions in the Social Security Act (which governs Medicare and
Medicaid) concern false statements or representations involving benefits or payments
under a federal or state health care program, including Medicare or Medicaid. Other
provisions of the Social Security Act address kickbacks—prohibiting anyone from
knowingly and willfully offering, soliciting or receiving payment in return for referrals or
orders of medical services or items paid for, in whole or in part, under a federal or state
health care program. Fines of up to $25,000, imprisonment of up to 5 years, or both can
be imposed. Exclusion from federal and state health care programs may also be imposed
and is mandatory for certain criminal convictions.

Civil Monetary Penalties Law
This law authorizes the U.S. Department of Health and Human Services to pursue an
administrative action instead of a criminal or civil action for Medicare or Medicaid fraud.
The provider or individual does not have the right to a jury trial. Instead, an administrative
law judge in the Department of Health and Human Services makes the initial
determination of liability. Fines can be up to $11,000 per violation relating to false claims
and up to $25,000 for violations relating to kickbacks. In addition, under a false claims
civil monetary penalty prosecution the provider or individual is subject to an assessment
of up to three times the amount claimed for each item, and the provider or individual can
be excluded from Medicare and Medicaid.

Prescription Drugs & Controlled Substances Laws
Wal-Mart and its Associates are legally responsible for the proper distribution and
handling of pharmaceutical products and preventing unauthorized access to them. The
diversion of any prescription drug or controlled substance, in any amount for any reason
to an unauthorized individual or entity is forbidden. It is the Pharmacy Division’s policy
that all Associates be both diligent and vigilant in carrying out their obligations regarding
controlled substances in accordance with all applicable laws, regulations and policies and
procedures. Every Pharmacy Associate is expected to adhere to the highest professional
standards in safeguarding pharmaceuticals; preventing unauthorized use or access; and
securing and documenting the use of controlled substances. The Division shall conduct
continual internal monitoring and auditing of the handling and dispensing of controlled
substances.
Any violation of law or policy involving prescription drugs or controlled substances may
constitute grounds for dismissal. Should you become aware of potential violations of any
law, policy or regulation relating to pharmaceuticals, you must advise your supervisor, the
Legal Department or the Professional Services Compliance Officer immediately. Reports
of drug diversion by fellow Associates are not only a necessary part of an overall
Associate security program but also serve the public interest at large. Wal-Mart shall treat
such reports as confidential and shall take all reasonable steps to protect the
confidentiality of the information and the identity of the Associate furnishing the
     information.
     Wal-Mart is committed to ensuring only qualified health care professionals treat Wal-
     Mart patients. Pharmacy Associates must abide by all applicable licensing and
     certification requirements.

Handle Company Records Appropriately.
    In the course of its business, the Company produces and receives large numbers of
    documents, including paper records, electronic information such as computer files or
    electronic mail, or information stored on any other medium. Numerous laws require the
    retention of certain documents for various periods of time. Any questions pertaining to
    how long a record must be retained according to our current Corporate Retention
    Schedule should be directed to the Legal Department.
     In order to detect and prevent fraudulent practices, Federal and state governments
     frequently investigate health care entities. The Company’s policy is to provide full
     cooperation to these government authorities while protecting the rights of Wal-Mart and
     its Associates. During any investigation, you must not conceal, destroy or alter
     documents or lie or make misleading statements to government officials. Because
     investigations may involve complicated legal issues, you must notify the Legal
     Department prior to responding to any requests from a government official. Anyone who
     is contacted, orally or in writing, at home or at work, by a person stating that he or she is
     investigating on behalf of the government or an insurer, may refer that person to the
     Compliance Officer or Legal Department.

         Things to Remember!
            •   If you learn of a subpoena or Government investigation, you should
                immediately contact the legal department at (479) 273-4505.
            •   Never conceal, alter, or destroy documents or lie or make misleading
                statements in the course on an investigation.
Confidential Disclosure Program
     Pharmacy encourages all Associates to report potential problems, violations
     and non-compliance to allow for appropriate internal investigation and
     corrective action. Our goal is to have effective communication between our
     Associates and the Compliance Office.
     If you have questions regarding this Code or encounter any situation that you believe may
     be unethical or may violate the Code or any law, policy or regulation, you should
     immediately consult your supervisor, the Legal Department or the Professional Services
     Compliance Officer at (479) 277-9022. You may also call the confidential toll-free
     PHARMACY COMPLIANCE HOTLINE at (800) 530-9923 or the Ethics Helpline at
     (800) WMETHIC to report potential instances of non-compliance.
     At any time, you can call the Pharmacy Hotline or the Ethics Helpline to ask a question or
     to report a concern. When you call, the person answering the telephone will assume you
     wish to remain anonymous unless you specify otherwise. If you remain anonymous, your
     call will be assigned a unique number. You can use this number to call back
     and obtain information on the status of your question or concern. Calls are not
     traced or recorded.
     For more information on the Confidential Disclosure Program, refer to the
     Confidential Disclosure Program (POM 1709) listed Standard Practices section
     on the WIRE.

        Things to Remember!
             •   The Compliance Hotline may be reached 8:00 AM to 5:00 PM CST,
                 Monday through Friday. After hours and on weekends, messages may be
                 left and your call will be returned, or the issue will be addressed.
             •   You may remain anonymous when calling the Compliance hotline.

Non-Retaliation
    Wal-Mart Pharmacy prohibits any form of retaliation against any Associate who, for
    lawful purposes:
         •   Makes a complaint regarding a suspected violation of law or policy (a
             protected disclosure);
         •   Reports a suspected violation of law by the Company or its agents acting on
             behalf of the Company, to the Professional Services Compliance Officer or the
             Legal Department;
         •   Provides information, causes information to be provided, or assists in an
             investigation conducted by the Company or any governmental body, regarding a
             possible violation of any law or regulation relating to fraud or any rule or
             regulation;
         •   Files, causes to be filed, or assists, participates or gives testimony in any
             proceeding relating to an alleged violation of any such law, rule or regulation; or
         •   Reports a suspected violation of law which the Associate reasonably
             believes constitutes a violation of a local, state or federal statute by the
             Company, or its agents acting on behalf of the Company, to a local, state
             or federal regulatory or law enforcement agency.
     Any Associate who reports a violation or suspected violation by the Company
     may not be reprimanded, discharged, demoted, suspended, threatened,
     harassed or in any manner discriminated against in the terms and conditions
     of the Associate’s employment for, or because of, the reporting of the
     suspected violation.
     If an Associate believes that he or she has been retaliated against (including
     threatened or harassed) in violation of this Code and Wal-Mart Company Policy,
     he or she should immediately report it to the Legal Department, the
     Professional Services Compliance Officer, the Pharmacy Compliance Hotline
     or the Ethics Helpline. Once an Associate reports prohibited retaliation, the
     Company will promptly investigate the matter. The investigation will be handled
     as discreetly as reasonably possible, allowing for a fair investigation and any
     necessary corrective action.
     Appropriate corrective action will be taken whenever retaliation is determined to
     have occurred. Depending on the nature of the violation, the offending
     individual may be subject to disciplinary action up to and including termination.
     In addition, anyone who interferes with an investigation, or provides information
     in an investigation that the individual knows to be untrue or inaccurate, will be
     subject to disciplinary action, up to and including termination of employment.
     Retaliation against Associates who in good faith file a complaint or participate
     in an investigation is strictly prohibited.
     IT IS COMPANY POLICY TO ENSURE THAT NO ASSOCIATE IS PENALIZED FOR
     RAISING AN ISSUE OR CONCERN.
     Your commitment to responsible and ethical conduct is expected for this Division to
     continue to be a recognized leader in the pharmacy community.

         Things to Remember!
             •   Retaliation against Associates who in good faith file a complaint
                 or participate in an investigation is strictly prohibited.

Disciplinary Guidelines
     Our pharmacy operations are subject to extensive federal, state and local regulations,
     including Medicare and Medicaid reimbursement rules and regulations, including
     Medicare and Medicaid reimbursement rules and regulations, and federal and state
     laws regarding the collection, use and disclosure of patient health information.

     Failure to adequately comply with this Code will be considered in an Associate’s
     annual performance evaluation. Associates should be aware that federal and state
     government regulators can impose monetary penalties and criminal penalties for
     violations of federal and state claims submission rules and regulations.

     Managers and hourly Associates of the Pharmacy Division who fail to comply with
     the Code of Conduct (the Code), billing policies and procedures, federal, state, or
     private health care program requirements, or those who have otherwise engaged in
     wrongdoing, have the potential to impair Wal-Mart’s status as a reliable, honest and
     trustworthy pharmacy provider. Therefore, violations of the Code or billing policies
     and procedures (e.g. Partial Fill) will be treated seriously and will result in one or
     more of the following actions by management, based on the seriousness of the
     offense:
                • Verbal Coaching;
                • Written Coaching;
                • Decision-Making Day;
                • Termination;
                • Referral for criminal prosecution or civil action.

     Associates who fail to comply with federal and state health care program (e.g.,
     Medicare and Medicaid) requirements or with Wal-Mart’s billing policies and
     procedures face the possibility of civil and criminal fines and other punishment for
     health care fraud. Any Associate convicted of health care fraud also faces the
     possibility of being placed on the federal exclusion list, which makes them ineligible
     to participate in any manner in federally funded health care programs.

     Disciplinary action, up to and including termination, may be taken against any
     Associate who directs or approves infractions or has knowledge of them and does
     not move to promptly correct them in accordance with the Code.
     Annual performance evaluations will include an assessment of the Pharmacy
     Associate’s known adherence to compliance principles.


        Things to Remember!
            •   Failure to adequately comply with this code will be considered in the
                Associates Annual Performance Evaluation.
            •   Associates who fail to comply with federal and state healthcare program
                requirements could face civil and criminal penalties.

Honor Confidences

Our Patients expect their private health information to be handled appropriately.
Confidential information relating to the Pharmacy should also be protected.
Pharmacy is committed to respecting the confidentiality and security of patient
information and complying with state privacy laws and the Health Insurance
Portability and Accountability Act (“HIPAA”) and all other privacy regulations. HIPAA
includes provisions relating to the privacy and security of patient health information
and standards for electronic transactions. Internal access to Pharmacy records is
not appropriate unless there is a legitimate work-related need to see the information.
All efforts will be made to protect personal and confidential information concerning
the Pharmacy and our Patients. For more information, see Section 1600 of the
Pharmacy Operations Manual.
     Compliance Contacts
     Compliance Hotlines
          Pharmacy Compliance Hotline (800) 530-9923

                          HIPAA Hotline (800) WAL-MART (External)
                                        (479) 621-2652 (Internal)

                           Ethics Hotline (800) WMETHIC

     Professional Services Compliance Office
     Director of Compliance (Professional Services Compliance Officer)
                                   Phone (479) 277-9022
                                      Fax (479) 273-1986

     General Compliance Questions
           CIA / Billing Questions, email rxcomply@email.wal-mart.com
                       HIPAA Questions hipaarx@wal-mart.com

     Pharmacy Legal
                                     Phone (479) 204-8786
           if no answer, legal switchboard (479) 273-4505
                                       Fax (479) 204-9575

				
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