Providers’ Internal Struggles to Understand and Interpret Ambiguous Regulatory Requirements Are Fair Game to the Government and Whistleblowers
On June 1, 2023, the U.S. Supreme Court issued a highly-anticipated opinion available here, in United States ex rel. Schutte v. SuperValu Inc.,[1] which strengthened the False Claims Act (FCA),[2] and tilted the scales of power even more against providers.
The Court considered a growing defense to liability, which allowed a defendant to point to an “objectively reasonable interpretation” of an ambiguous regulatory requirement—even if it was not their subjective interpretation—in arguing they had not “knowingly” submitted a false claim. In a unanimous decision written by Justice Thomas, the Court held that evidence of a provider’s contemporaneous subjective beliefs about the lawfulness of its conduct is always relevant to prove the FCA’s scienter element, even when the provider is called to interpret an ambiguous regulatory requirement.
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