Kmart Pays $1.4 Million Settlement in Medicare Fraud Case

The Kmart Corporation has agreed to pay $1.4 million to settle allegations by the federal government that it violated the False Claims Act. The U.S. Department of Justice said Kmart was accused of inducing beneficiaries under Medicare to fill prescriptions at Kmart pharmacies.

According to reports, Kmart let Medicare beneficiaries use coupons from drug manufacturers to either eliminate or reduce co-payments for prescriptions. This caused people to specifically seek out name-brand pharmaceuticals rather than the cheaper generic versions of the drugs, which ultimately increased costs to the government. Kmart was also accused in the same lawsuit of offering improper discounts on gasoline purchases at a number of gas stations based on the number of prescriptions filled in the scheme.

Whistleblower to receive substantial reward

Federal government investigators said the scheme lasted from June 2011 to June 2014. The claims were first brought forth in a 2013 whistleblower claim filed by a former Kmart pharmacist in Kansas City, Missouri. For his role in bringing the case to light, he will receive $248,500 of the $1.4 million settlement.

Kmart admits no liability in settling the lawsuit. The company has approximately 780 pharmacies, but there is currently no information available regarding how many of these pharmacies participated in the alleged fraudulent scheme.

It’s important for businesses and organizations of all sizes to respond quickly and effectively to allegations of wrongdoing through comprehensive investigations. To learn more about how to best protect your company, consult the dedicated attorneys at Whistleblower Law for Managers in Dallas, Texas.