Jan 13 (Reuters) - The U.S. Supreme Court on Friday agreed to consider reviving two lawsuits accusing pharmacy operators of overbilling government health insurance programs for prescription drugs, a dispute that could have broad implications for whistleblowers and the government's ability to go after fraud.
The key question in both cases is whether companies can shield themselves from whistleblower fraud lawsuits by pointing to an "objectively reasonable" interpretation of the law that supports their conduct - regardless of whether they actually believed that interpretation in good faith at the time.
That is what both Safeway Inc and SuperValu Inc, which was acquired by Rhode Island-based United Natural Foods Inc (UNFI.N) in 2018, argued in lawsuits filed by whistleblowers accusing them of defrauding Medicare and Medicaid. The Chicago-based 7th U.S. Circuit Court of Appeals agreed, granting judgment in favor of the companies. The whistleblowers appealed to the Supreme Court.
"We are glad the court took up this important issue," said Tejinder Singh, a lawyer who represents the whistleblowers in both cases.
Safeway and United Natural Foods did not immediately respond to requests for comment.
Both lawsuits claim that the pharmacy operators billed Medicare and Medicaid for prescription drugs based on artificially high sticker prices, while charging most customers paying for the drugs out of pocket much lower prices through discount programs.
The whistleblowers said that...
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