Attorney General Sam Olens has announced that Georgia has joined with other states, territories, and the federal government to reach an agreement with Kmart Corporation (“Kmart”) to settle allegations that Kmart submitted false claims and false statements through its Kmart Pharmacy Centers to the federal government, state governments, and territories for payments relating to partial fills of prescriptions.

Kmart will pay the states, the territories and the federal government a total of $2.55 million in civil damages and penalties to compensate Medicaid, Medicare and various federal healthcare programs for harm suffered as a result of its conduct. As part of the settlement, the State of Georgia will receive approximately $22,000 in restitution and other recovery.

Kmart is alleged to have violated the False Claims Act by billing government health care programs (Medicaid, Tricare and the Federal Employee Health Benefits Program) for all drugs included in a prescription when, for many prescriptions, it dispensed only a portion of the prescribed drugs. Although billed in full to the government health care programs, the remaining portion of the prescriptions was never dispensed to beneficiaries and was later returned to stock.

This settlement is based on a qui tam whistleblower case that was filed in the United States District Court for the Eastern District of Michigan by a private individual who filed the action under the federal false claims statute.