K-Mart To Pay Settlement For Overbilling Medicaid Customers In Illinois

SPRINGFIELD, IL - Illinois has joined with other states and the federal government to settle allegations that Kmart Corporation charged the Medicaid program more than its usual charge for certain drugs.

According to Illinois State Police, the settlement arises out a qui tam lawsuit currently filled in the United States District Court for the Southern District of Illinois. The lawsuit alleged that Kmart was submitting false claims when it charged federal health care programs higher prices than it was charging cash paying customers.

The premise of the claim is that the federal government and every state Medicaid program requires that a provider charge no more than its "usual and customary" rate for a good or service.

Therefore, when Kmart billed and received $5 for a prescription that cash paying customers could purchase for $4, the lawsuit claimed that Kmart was falsely representing the usual and customary rate.

Under the Settlement agreement, Kmart agreed to pay a total settlement of $1,062,893.81 to resolve the overbilling allegations in Illinois.

The settlement proceeds will be shared between the Federal and state government.

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