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., which strengthened the False Claims Act (FCA), 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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