Kmart will pay more than $400,000 to Kentucky to resolve state and federal Medicaid program overbilling allegations, Attorney General Andy Beshear announced Thursday.
Kentucky will receive $415,000, with $100,000 going to the state’s Medicaid program. The remainder will cover Kentucky’s Medicaid obligations to the federal government, Beshear said.
The deal is part of a $59 million settlement against Kmart from federal, state and insurance company claims, which arose from a 2008 lawsuit, according to the Chicago Tribune.
An Ohio Kmart pharmacist claimed that the chain store offered cash-paying customers discounts on generic drugs, but it didn’t report the discounted prices to the federal health care programs. The lawsuit claimed that Kmart was submitting false claims when it charged federal health care programs higher prices than it charged cash-paying customers, Beshear said.
By allegedly not disclosing the discounted prices, Kmart wasn’t accurately reporting its “usual and customary” rates, which it is required to do.
The agreed-upon settlement resolved allegations from 2004 to 2014, Beshear said.
“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.”