Kmart to pay more than $400,000 over Medicaid fraud allegations

FRANKFORT, Ky. (WTVQ) – Kmart Corporation will pay more than $415,000 to Kentucky over state and federal Medicaid program overbilling allegations.

Attorney General Andy Beshear says Kentucky joined other states and the federal government to settle allegations regarding the company’s Retail Maintenance Program that offered discounts on generic drugs to its cash paying customers.

In the mid-2000’s, Kmart, along with many other pharmacies, began offering discounted generic drugs to their cash-paying customers.

Those customers were typically paying $4 for a 30-day supply.

The attorney general says, while other pharmacies with similar programs gave federal health care programs the benefits of these prices, Kmart, owned by Sears Holdings Management Corporation, was submitting false claims when it charged federal health care programs higher prices than it was charging cash-paying customers.

Kentucky’s Medicaid program will be reimbursed more than $100,000 and the remainder of the payout will cover Kentucky’s Medicaid obligations to the federal government, roughly $315,000.