A recent decision by the Supreme Court clarified the required intent for a defendant to be held liable under the False Claims Act. According to the Court, the FCA’s scienter requirement refers to a defendant’s knowledge and subjective beliefs – not what an objectively reasonable person might have known or believed. This ruling removes potential defenses for FCA defendants and makes the dismissal of FCA claims on the basis of scienter much less likely before discovery has been completed.
Background
The consolidated cases involved allegations that two pharmacies defrauded Medicare and Medicaid by selling drugs at a lower rate to the public, while receiving reimbursement at a higher rate from the government. See United States et al. ex rel. Schutte et al. v. Supervalu Inc., et al, No. 21-1326, and United States et al. ex rel. Proctor v. Safeway, Inc.,, No. 22-111.
A brief explanation of the payment system is helpful to understanding this ruling. State Medicaid plans offer outpatient prescription drug coverage to qualifying people. However, the Center for Medicare and Medicaid Services has issued regulations that limit pharmacies’ reimbursement rates to the lower of either the (1) actual acquisition cost plus a dispensing fee or (2) the provider’s usual and customary charges to the general public. Likewise, through Medicare Part D, qualifying individuals may also receive prescription drug coverage. The pharmacies’ reimbursements from Medicare are typically limited to the “...
The lawsuit alleges the CCRB’s online database, 50-a.org, unfairly harms officers by listing serious accusations including sexual misconduct, racial profiling and making false official statements ...