The Supreme Court Justices of the United States ruled 9-0 to throw out a 7th Circuit Court of Appeals ruling that said that pharmacies for Safeway and SuperValu cannot be held accountable for fraudulent drug billing. Whistleblowers are seeking monetary damages for a claim alleging that the pharmacies charged less for customers who paid cash while knowingly charging higher rates to government healthcare programs that reimburse the pharmacies for covered prescription drugs.
Federal law requires pharmacies to bill at their “usual and customary” price. The plaintiffs allege that the pharmacies were well aware of their regulations. The defendants, on the other hand, claimed that the Medicare and Medicaid regulations for billing were unclear, and they did a reasonable reading of the law.
Justice Clarence Thomas wrote in the ruling: “What matters for an FCA case is whether the defendant knew the claim was false,” adding that “it does not matter whether some other, objectively reasonable interpretation” exists.
The high court’s decision was hailed by whistleblowing advocates, who believed the lower court’s ruling would enable the pharmacies and other fraudsters to avoid accountability for filing fraudulent bills. Several states also voiced concerns that the lack of accountability would affect their state-administered Medicaid programs. The Biden Administration also expressed concern that the Circuit Court ruling would weaken the False Claim Act.
This firm is not involved in either court’s ruling and does not represent the whistleblowers.
