What Kmart ’s Settlement Says About Health Care Fraud

This reportedly violated regulations requiring pharmacies to apply their usual and customary charges when billing government payers. The DOJ claims that “[t]he government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud,” It might more accurately have said that the settlement adds to the mountain of evidence showing that the government cannot control even the most obvious forms of health care fraud, a point we make at length in our forthcoming book, Overcharged: Why Americans Pay Too Much For Health Care. For one thing, at the very same time government payers were honoring Kmart’s inflated bills, they were receiving bills from retail pharmacies like Walmart that accurately stated the proper charges for the very same drugs. When James Garbe, the pharmacist who discovered what Kmart was doing, had a prescription for Lisinopril/HCTZ filled at Walmart, he paid $10 and Walmart bill his Medicare Part D plan $2, the difference between his copay and Walmart’s cash price of $12. When he had the same prescription filled at Kmart, he again paid $10 but Kmart billed his Part D plan $50.84, bringing the total to $60.84. Because Kmart’s cash price was $15, the additional charge should only have been $5. But, apparently, no one at Garbe’s Part D carrier wondered why Kmart’s charge was 25 times as much as Walmart’s, even though the stores are rivals that compete for the same customers. Medicare didn’t check Kmart’s cash...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Uncategorized Charles Silver David Hyman K-Mart Lisinopril Source Type: blogs