The federal government wants the US Supreme Court to revive a False Claims Act suit alleging SuperValu Inc. overcharged healthcare programs for prescription drugs.

The US Court of Appeals for the Seventh Circuit ruled—in a split decision—that whistleblowers Tracy Schutte and Michael Yarberry didn’t show that SuperValu knowingly misreported the usual and customary prices it charged, causing Medicare and Medicaid to overpay. The whistleblowers filed their petition to challenge the decision in April.

The Seventh Circuit improperly found that a defendant’s subjective bad faith is never sufficient to establish scienter under the FCA, US Solicitor General Elizabeth Prelogar said ...

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