Jury Clears SuperValu of Liability in Whistleblower FCA Prescription Pricing Case

Jury Clears SuperValu of Liability in Whistleblower FCA Prescription Pricing Case

A federal jury in Illinois recently found SuperValu not liable in a whistleblower lawsuit that accused the company of overcharging the government for millions of prescriptions by billing higher-than-customary prices. The case had gained attention after a 2023 US Supreme Court ruling revived it, focusing on whether SuperValu knowingly submitted false claims. While the jury found that SuperValu’s false claims to the federal government and the state of Illinois were made knowingly, they concluded that these actions did not result in damages.

The allegations centered on SuperValue’s price-match program, which ran from 2006 to 2016 and was meant to compete with a competitor’s $4-a-month prescription program. The whistleblowers argued that SuperValu’s matched prices should have been reported as the usual and customary (U&C) prices for government reimbursement. Instead, SuperValu allegedly charged higher sticker prices, leading to claims of fraudulent earnings amounting to $123 million from various federal programs, including Medicare and Medicaid, as well as state reimbursements in Illinois.

SuperValu contended that the false claims were not made knowingly, as internal and external communications indicated a belief that the U&C price was the sticker price rather than the matched price. The Supreme Court’s decision in 2023 underscored that liability under the False Claims Act hinges on whether the defendants genuinely believed their claims were false. Despite previous rulings suggesting the price-matched amount should have been the U&C price, the jury ultimately ruled that SuperValu was not liable for damages, concluding this phase of the litigation.

The case is Schutte et al. v. SuperValu et al., case number 3:11-cv-03290, in the US District Court for the Central District of Illinois.

Special Master Recommends Dismissing UnitedHealth Medicare Fraud Case

Court-appointed special master, Suzanne H. Segal, recommended dismissing a FCA case filed against UnitedHealth over its Medicare Advantage plans due to the lawsuit’s reliance “entirely on speculation and assumptions” that UnitedHealth ignored and exaggerated patient diagnoses and retained overpayments. Segal found that the government failed to review necessary medical records to substantiate claims that UnitedHealth overbilled Medicare or knowingly retained overpayments, failed to designate an expert to identify invalid diagnosis codes, and had not yet alleged any deception. She recommended that the District Judge grant summary judgment in favor of UnitedHealth.

The case is U.S. ex rel. Poehling v. UnitedHealth Group Inc., et al., Case No. 2:16-cv-08697 (C.D. Cal.).

Jury Trial Began March 3 in Alleged $40 Million COVID-19 Test Fraud Scheme

The owners of Innovative Genomics LLC (IGX), Diego Sanchez Chocron and Gregory “Milo” Caskey, stand accused of fraudulently billing Medicare for unnecessary COVID-19 and genetic tests and for paying bribes to doctors for test referrals, including tests for deceased individuals.

At trial, counsel for the defendants argued that the government distorted facts and misjudged payments to doctors. Instead, the evidence showed the defendants acted in good faith to comply with legal standards and addressed any mistakes proactively. Sanchez’s attorney highlighted his inexperience in health care and reliance on expert advice, arguing that funds were reinvested into legitimate lab operations.

Enrique Perez-Paris, a lifelong friend of Sanchez and an investor in IGX, and Omar Palacios, a patient recruiter, both pled guilty and will testify for the government.

The case is U.S. v. Perez-Paris et al., Case No. 1:24-cr-20155 (S.D. Fl.).

Health Care Providers and Marketers to Pay Over $1.9 Million to Resolve Kickback Allegations

Several health care providers and associated parties agreed to pay a total of $1,913,808 to resolve allegations of FCA violations through laboratory kickback schemes. The involved parties are alleged to have received and paid kickbacks for laboratory testing referrals, which led to false claims being submitted to Medicare and TRICARE, thus, violating the Anti-Kickback Statute. The settlement resolves allegations, and no determination of liability has been made. 

The Offices of the United States Attorney’s (USAO) press release is available here.