Georgia and 31 other states and U.S. territories, and the federal government, will share in a $2.55 million agreement reached with Kmart, which was accused of obtaining full government reimbursements for partially filled prescriptions at the retailer’s pharmacies, the state attorney general’s office announced Wednesday.
Kmart did not admit to any wrongdoing but agreed to pay civil damages and penalties to compensate Medicaid, Medicare and other federal health care programs, Attorney General Sam Olens’ office said. Georgia will receive $22,000 of the payout.
In a statement to The Atlanta Journal-Constitution, Kmart said it settled to avoid a lengthy legal battle.
“Kmart amicably resolved this matter so it could focus its efforts and resources on serving its members rather than engaging in protracted litigation,” spokesman Howard Riefs said. “This matter involved alleged pharmacy practices that occurred prior to 2006. Kmart never agreed that it engaged in wrongdoing and instead fully cooperated with the U.S. attorney’s office in ending this dispute.”
The retailer was accused of violating the federal False Claims Act. Instead of giving patients a full prescription, the retailer allegedly returned the remaining drugs to stock.
A portion of the settlement amount will go to whistle-blower Mark Kirsch, a former Kmart traveling pharmacist who first filed a complaint against the retailer in Detroit. Kirsch will receive $309,687.
“Cases like this one help ensure that health care program funds are used for the benefit of patients and not instead lost in the bureaucracy of large pharmacies,” U.S. Attorney Barbara McQuade said.
Detroit-based Kmart is part of Sears Holdings Corp.
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