amicus brief challenging the federal government’s interpretation of the False Claims Act, stating that it would adversely impact hospitals, providers, and payers.
The brief was in response to United States v. Supervalu Inc. v. Safeway Inc., which raised the question of the False Claims Act’s scienter element, or defendant’s knowledge and nature of intent. The statute says that liability requires a person to “knowingly” file false claims.
In the consolidated cases, SuperValu and Safeway pharmacies faced allegations that they filed false claims for dispensed prescription drugs under Medicare and Medicaid programs.
The whistleblowers alleged that the pharmacies failed to account for discounts when reporting their “usual and customary” prices for prescription medication. Pharmacies must submit the “usual and customary” figures to the federal government, which then factors the discounts into the reimbursement calculation.
Since the pharmacies did not report the discounts, the whistleblowers alleged that they received inflation reimbursement from the government.
The US Seventh Circuit Court of Appeals sided with the pharmacies. It ruled that the relators failed to establish that the defendants acted “knowingly” or acted with reckless disregard when they did not report the discounts. Therefore, the Court determined that the defendants could not be liable under the False Claims Act.
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