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Kmart Pays $32 Million for Overbilling Federal Health Programs

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Philadelphia health care lawyers ensure healthcare agencies comply with anti-kickback laws and that pharmacies remain transparent about drug pricing with federal health programs funded by tax payers. National retail giant, Kmart Corporation, recently agreed to pay the United States $32.3 million to settle allegations that in-store pharmacies overcharged federally-funded health care programs for generic drugs. The settlement stems from a 2008 False Claims Act lawsuit filed by an Ohio pharmacist, who stands to receive more than $9 million for his portion of the recovery. The Justice Department notes the settlement does not represent any decision on liability.

Understanding the False Claims Act

The False Claims Act (FCA) is a federal statute intended to prevent and punish fraud against the United States government. The statue applies to different types of fraud but is primarily used in the context of health care. The FCA offers a financial reward to whistleblowers who disclose fraud. The FCA essentially punishes anyone who creates or conceals a false claim for approval, avoidance, or decrease of a payment obligation to the government. Liability for violating the FCA is monetary as the law approves a civil penalty between $5,000 and $10,000 for each individual claim, plus three times the government’s damages sustained because of the fraudulent claim.

A Closer Look at the Kmart Case

The whistleblower pharmacist began working for Kmart in May 2007. He alleges that company pharmacists offered generic drug discounts for customers paying with cash, but failed to report those discounts to Medicare, Medicaid, and TRICARE. By neglecting to report discounted pricing, government health care programs possibly overpaid for prescription drugs.

The settlement warns pharmacies to remain transparent about drug pricing with federal health programs funded by tax payers. It also serves as an incentive for pharmacists and other health care workers to remain vigilant and report fraud when they see it. The Kmart whistleblower settlement is part of a larger global settlement resolving state Medicaid and insurance claims against Kmart.

Philadelphia Health Care Lawyers at Sidney L. Gold & Associates, P.C. Ensure Healthcare Agencies Comply with Anti-Kickback Laws

Penalties for violations of anti-kickback laws are steep. Whistleblowers have a moral incentive to report fraud that trickles down to every taxpayer. Philadelphia health care lawyers at Sidney L. Gold & Associates, P.C. help physicians, hospitals, and medical providers stay compliant with complex anti-kickback laws. Whistleblowers are also protected under the law. If you suspect you have experienced retaliation at work after reporting fraud, our employment lawyers will fight for your rights. Call 215-569-1999 or submit an online inquiry today. We are centrally located in Philadelphia, Pennsylvania, and we serve residents throughout the surrounding areas.

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