At the intersection of law and business, ambiguity can present significant challenges. But one thing seems apparent under the False Claims Act (“FCA”) for health care entities submitting reimbursement claims to the government: if you subjectively believe that your claims are or might be false, you likely have the requisite intent to violate the FCA. And this principle may hold true even if there is technically some ambiguity about the facts underlying the representations inherent in presenting your claim to the government.

On June 1, 2023, in U.S. ex rel. Schutte v. Supervalu Inc. and U.S. ex rel. Proctor v. Safeway, Inc., the U.S. Supreme Court unanimously confirmed the FCA’s intent standard, holding that the FCA’s scienter element turns on one’s subjective knowledge, rather than what an objectively reasonable person may have known or believed. The Court overturned the previous 7th Circuit decisions with similar but distinct qui tams actions brought against two retail chain pharmacies concerning the pharmacies’ reporting of their “usual and customary” prices. In those cases, the 7th Circuit applied the intent standard adopted by the Supreme Court under the Fair Credit Reporting Act in Safeco Ins. Co. of America v. Burr, 551 U.S. 47 (2007), holding that the defendant pharmacies could not be found to have acted with requisite intent under the FCA if their conduct was consistent with any objectively reasonable interpretation of the law. In each case, the defendant...

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