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Kmart Corporation to Settle Allegations For Partially Filled Prescriptions

MADISON — Attorney General J.B. Van Hollen announced today that Wisconsin has joined with other states, territories, and the federal government and reached 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, territories, and 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, Wisconsin will receive $34,911.06 in restitution and other recovery.


The lawsuit asserts that Kmart violated the federal False Claims Act by returning to stock and failing to delete or re-adjudicate prescriptions that were billed to Medicaid or other federal health insurance programs but were not picked up by customers from January 2004 to October 2005.


This settlement is based on a qui tam 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.