On June 1, the US Supreme Court held in United States ex. rel. Schutte v. Supervalu, Inc. that a health-care provider or supplier can’t escape liability under the False Claims Act’s knowledge, or scienter, requirement.
It argued it had an objectively reasonable interpretation of the relevant statute if, subjectively, the provider is aware of information that the claim is false, is aware of a substantial risk that the claim is false but intentionally avoids taking steps to confirm the truth of the claim, or acts in reckless disregard of whether the claim is false.
The court reversed the Seventh Circuit Court of Appeals’ award of summary judgment to Supervalu and Safeway in False Claims Act cases, where the two entities’ pharmacies had misreported usual and customary pricing to Medicaid state agencies. The court thus rejected the Seventh Circuit’s approach.
This held that if the conduct of a person submitting a claim to the government is consistent with any objectively reasonable interpretation of the relevant law that hadn’t been ruled out by definitive legal authority or guidance, then the claim couldn’t be false.
Instead, the unanimous court focused on the subjective intent of a provider or other contractor submitting...
Welcome to Reality Check, NewsGuard’s nonpartisan newsletter that tracks the false claims and conspiracy theories that shape our world — and who’s behind them. Please support us by becoming a premi...