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Kmart to pay KY $415,000 to resolve Medicaid Fraud allegations Allegations involve company submitting false claims in its generic drug program Click on headline for complete story By Terry Sebastian or Crystal Staley News from Kentucky Attorney General Andy Beshear's office FRANKFORT, KY (Thu 4 Jan 2018) - Attorney General Andy Beshear today announced that the Kmart Corporation will pay more than $415,000 to Kentucky to resolve state and federal Medicaid program overbilling allegations. Beshear joins with 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-2000s, Kmart, along with many other pharmacies, began offering discounted generic drugs to their cash paying customers, typically $4 for a 30-day supply. Although some pharmacies with similar programs gave federal health care programs the benefits of these prices, a lawsuit filed in the United States District Court for the Southern District of Illinois alleged 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. The federal government and virtually every state Medicaid program require that a provider charge no more than its "usual and customary" rate for a good or service. Beshear's Office of Medicaid Fraud and Abuse worked with the states and the United States Department of Justice to enter into a settlement agreement to resolve these allegations from the company for the time period of Sept. 1, 2004, through Dec. 31, 2014. 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. "As Attorney General, I am committed to holding any company that defrauds Medicaid accountable," Beshear said. "The actions of companies like Kmart defraud not only the government but the people government serves." This story was posted on 2018-01-04 09:28:27
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