On April 5, 2022, in a 2-1 decision, the Seventh Circuit applied the precedent it set in United States ex. rel. Schutte v. SuperValu Inc., 9 F.4th 455 (7th Cir. 2021) (discussed here) and found once again that a defendant retail pharmacy did not act with “reckless disregard” under the False Claims Act (“FCA”) by interpreting Medicare Part D and Medicaid “usual and customary” price requirements as allowing it to charge those programs its retail cash prices rather than prices offered through discount programs. United States ex rel. Proctor v. Safeway, Inc., No. 20-3425, 2022 WL 1012256 (7th Cir. Apr. 5, 2022).
As in SuperValu, the Seventh Circuit’s decision was premised on the standard for “reckless disregard” established by the Supreme Court in Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007). Under Safeco, a defendant interpreting an ambiguous statute or regulation does not act with reckless disregard if: (1) the interpretation was “objectively reasonable”; and (2) “authoritative guidance” did not warn the defendant away from that interpretation. Safeco, 551 U.S. at 70. Accordingly, the Seventh Circuit first considered whether the defendant’s interpretation of Medicare Part D and Medicaid’s “usual and customary” price requirements as allowing the charging of retail chase prices rather than discount program prices was “objectively reasonable.” The court readily concluded that as to both the defendant’s competitor pricing-matching discount program (the same type...
A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...