Supreme Court to hear False Claims Act case: 5 things to know

The Supreme Court will decide if pharmacies knowingly overcharged Medicare and Medicaid, in a case that could weaken the False Claims Act, NPR reported April 17. 

The Supreme Court will hear arguments in the case April 18, and a ruling is expected this summer. 

Here are five things to know about the case: 

  1. The case began in 2006, when Walmart began offering certain drugs at $4 for a 30 day supply. Other pharmacies followed suit to remain competitive. 

  2. Whistleblowers allege that Safeway and SuperValu charged Medicare and Medicaid far more than they charged consumers for drugs. Between 2008 and 2012, Safeway charged customers $10 for a 90-day supply of a common cholesterol drug but told Medicare its typical price was upward of $80, NPR reported. 

  3. In August 2021, the 7th Circuit Court of Appeals ruled SuperValu and Safeway were not liable for damages, because the companies had not knowingly violated the False Claims Act, even if  they "might suspect, believe, or intend to file a false claim." 

  4. The whistleblowers were joined by 33 states, the federal government and U.S. Senator Chuck Grassley in appealing the case to the Supreme Court. Mr. Grassley, an Iowa Republican who led efforts to strengthen the False Claims Act, told NPR the appeals court's ruling makes "a hash of the law of fraud."

  5. If the appellate court's ruling is upheld, it could make enforcement of the False Claims Act more difficult and put the onus on the government to anticipate new types of fraud, according to an analysis from the Cornell University Legal Information Institute. 

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