In Question Answering (QA), Retrieval Augmented Generation (RAG) has revolutionized performance in various domains. However, how to effectively capture multi-document relationships remains an open question. This is particularly critical for biomedical tasks due to their reliance on information spread across multiple documents. In this work, we propose a novel method CLAIMS, which utilizes propositional claims to construct a local knowledge graph from retrieved documents. Summaries are then derived via layerwise summarization from the knowledge graph to contextualize a small language model to perform QA. The structured summaries effectively capture explicit and implicit relationships between entities in the documents, thus having a more comprehensive context to provide to LLMs. CLAIMS achieved comparable or superior performance over RAG baselines on several biomedical QA benchmarks. We also evaluated its generalizability and each individual step of our approach with a targeted set of metrics, demonstrating its effectiveness.