Kmart Settles False Claims Act Allegations for Over $2.5 Million

November 1, 2013 — Whistleblowers save this country millions of dollars every year that would otherwise be lost on phony Medicaid schemes by unscrupulous pharmacies or other health care providers. The qui tam provisions included in the False Claims Act give health care employees the tools they need to help combat fraud in their own industry. In return for filing a whistleblower lawsuit on the government’s behalf, tipsters keep a portion of any recovery from the suit.

Kmart Pharmacies Allegedly Filed False Claims With Medicaid

Kmart Corporation has consented to pay $2,550,000 to the United States and 32 states to resolve a False Claims Act lawsuit filed against the company. The whistleblower alleged that Kmart’s national pharmacy centers had submitted false prescription claims to state and federal government healthcare programs, including Medicaid, the Federal Employee Health Benefits Program and TRICARE.

According to Newsroom America, the giant retailer’s pharmacies billed the healthcare programs for all drugs included in prescriptions, though the pharmacies often dispensed only a portion of the drugs a physician had prescribed. The prescriptions that were not dispensed were returned to stock to be sold to other customers. The practice allegedly took place from January 2004 to October 2005. In November 2005, Kmart was acquired by Sears Holding Corporation.

The whistleblower in the case was Mark Kirsch, a former Kmart traveling pharmacist who notified the government of the alleged violations when he filed a qui tam action in federal court in Detroit, Michigan. For his share of the settlement, Kirsch will receive $309,687.

The states and territories participating in the settlement include the following:
Alabama, California, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, Puerto Rico, and the Virgin Islands.

Conscientious Pharmacists Are Key to Ending Medicaid Fraud

False Claims Act violations involving phony claims by nationwide pharmacies frequently are revealed by pharmacy employees. Whistleblowers willing to collaborate need to understand how the process works before they notify the government. The qui tam attorneys with Waters & Kraus provide conscientious insiders with the legal representation they deserve. Email us or phone our False Claims Act attorneys at 855.784.0268 to learn more about our whistleblower practice and what we can do to help you.

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