U.S. ex rel. Garbe v. Kmart Corp.

Dist. Ct. did not err in denying defendant’s motion for summary judgment in qui tam action under Fraud Enforcement Recovery Act (FERA), alleging that defendant’s pharmacy violated certain Medicare reimbursement provisions in Medicare Part D program where defendant offered substantial discounts to customers to participate in its own drug discount plan while submitting for reimbursement from third-party insurers higher “usual and customary” prices for same prescription drugs that did not factor in said discount prices. Transactions under defendant’s discount drug program should have been part of “usual and customary” price submitted to third-party insurers. Ct. further found that: (1) section 3729(a)(1)(B) of 2009 Amendments to Fair Claims Act covered all cases pending on or after June 7, 2008; (2) defendant’s submission of inflated “usual and customary” prices of drugs constituted qualifying “false record” that was material to false or fraudulent claim because defendant’s misstatements were capable of influencing decision-maker; and (3) plaintiff was not required to show that defendant’s statement was delivered to any govt. official for claims covered by FERA. Ct. rejected plaintiff’s argument that third-party insurers were govt. officials for pre-FERA cases.