Page:U.S. ex rel. Schutte v. SuperValu.pdf/6

Rh Medicare, which provides federally funded health insurance coverage to individuals who are 65 or older or who are disabled, see 42 U. S. C. §1395 et seq.

As relevant here, States’ Medicaid plans may offer outpatient prescription-drug coverage to qualifying individuals. §1396d(a)(12). However, the Federal Centers for Medicare and Medicaid Services (CMS) has promulgated regulations that limit the amount these programs may reimburse for certain drugs. See 42 CFR §447.512(b)(2) (2021). Those regulations limit any reimbursement to the lower of two amounts, one of which is the healthcare provider’s “usual and customary charges [for the drug] to the general public.” Ibid. State Medicaid agencies likewise typically reimburse pharmacies for the lowest of different amounts, one of which is often the pharmacy’s “usual and customary charge” to the public. See CMS, Medicaid Covered Outpatient Prescription Drug Reimbursement Information by State, Quarter Ending September 2022 (Nov. 16, 2022), https://www.medicaid.gov/medicaid/prescription-drugs/state-prescription-drug-resources/medicaid-covered-outpatient-prescription-drug-reimbursement-information-state/index.html.

Through Medicare Part D, the Government also offers prescription-drug coverage to beneficiaries. See 42 U. S. C. §1395w–101 et seq.; 42 CFR pt. 423. To administer that coverage, CMS awards contracts to private plan sponsors. See 42 U. S. C. §1395w–115; 42 CFR §§423.315, 423.329. Those plan sponsors, in turn, enter contracts with pharmacies (sometimes through middlemen called pharmacy benefit managers). Many of the contracts at issue here limited any reimbursement to the pharmacy’s “usual and customary” price.

The bottom line is that, when respondents submitted reimbursement claims to these entities, they often were required to charge and disclose their “usual and customary”