Delaying the Return of Overpayments to the Government Could Cost You Millions
Recent statutory reforms have given rise to a new and increasingly-common form of liability under the False Claims Act (FCA) – so-called “reverse” FCA liability. Specifically, the Fraud Enforcement and Recovery Act of 2009 (FERA) modified the FCA such that it is now a violation of the statute to “knowingly” conceal or avoid repaying an “obligation to pay or transmit money” to the Government. An “obligation” to the Government is expressly defined to include “the retention of any overpayment” from a Government payor, such as Medicare. In 2010, the Patient Protection and Affordable Care Act (PPACA), specified that any such “overpayment must be reported and returned” to the Government within 60 days. The basis for FCA liability under these provisions is thus “reversed,” in the sense that whereas “[d]irect false claims cause the United states to remit money directly to claimants, reverse false claims facilitate the improper withholding of money or property to which the United States is legally entitled.” United States ex rel. Landis v. Tailwind Sports Corp., 155 F.Supp.3d 12, 14 (D.D.C. 2016).
Notably, the first “reverse” FCA case against a provider to result in a DOJ settlement involved a hospital group that allegedly “fraudulently delay[ed]” repaying Medicaid for approximately two-years. See Kane ex rel. U.S. v. Healthfirst, Inc., 120 F.Supp.3d 370, 378 (S.D.N.Y. 2015); see also https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-295-million-settlement-hospital-group-improperly. Critically, even though the hospital group did, in fact, return the overpayments to Medicaid, it still faced “reverse” FCA liability for its alleged failure to do so within the 60-day window. This delay ultimately cost the hospital group $2.95 million dollars in settlement payments.
FCA law is constantly evolving, posing new risks to providers. If you are in need of FCA defense, contact Frier Levitt today.
