The Supreme Court today will look at whether national pharmacies run by Safeway and SuperValu violated the government's flagship anti-fraud law — or whether the law's requirements are too unclear to hold the chains accountable.
Why it matters: Billions of dollars are at stake in the case, which pivots around the False Claims Act, a key tool used since the Civil War to penalize those who knowingly defraud the U.S. government. The law has driven scores of whistleblower complaints against health care companies for defrauding Medicare and other alleged misconduct.
How it works: The government can bring a case, or private individuals can launch 'qui tam' suits on behalf of the government which allows the whistleblower to keep a share of any money recovered in the case
- Settlements and judgments under the False Claims Act topped $2.2 billion last year, including about $1.7 billion from health-related cases.
- The government has recovered more than $72 billion since 1986 when Congress strengthened the law.
- But legal challenges have brought into question how to establish if companies knowingly intended to bilk the government.
Catch up quick: The potentially "game-changing case" started in 2006, when Walmart began offering deep discounts on commonly used drugs, according to NPR.
- In an effort to compete, SuperValu and Safeway extended discounts and price-matching deals to cash-paying customers, but charged Medicare and Medicaid the customary prices for the medicines. Whistleblowers...
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