Did pharmacy chain overcharge Medicare and Medicaid? Supreme Court will decide

Government contract attorneys are viewing Tuesday’s U.S. Supreme Court oral argument in a False Claims Act dispute as a case that could represent a pendulum shift sending shock waves through the business community. Two whistleblowers brought suit on behalf of the government, alleging that SuperValu bilked taxpayers in a scheme to present false Medicaid claims.

“If they go with the whistleblowers, it’s going to open up a lot of FCA cases,” Snell & Wilmer partner Brett Johnson said in an interview after Tuesday’s hearing in United States ex rel. Schutte v. SuperValu. “There’s a lot of people waiting in the wings, on both the plaintiff and federal side, waiting to see how this plays out.”

SuperValu, which owned and operated 2,500 grocery stores with over 800 in-store pharmacies between 2006 and 2016, implemented a discount drug program to remain competitive with other pharmacies. The chain contended this price-match program did not need to be reported as its “usual and customary” price to pharmacy benefit managers or federal payors.