The Affordable Care Act (ACA) requires physicians to report and return Medicare and Medicaid overpayments within 60 days of when the overpayment is “identified.” An improperly retained overpayment becomes an “obligation” under the False Claims Act (FCA), possibly resulting in fines of up to $11,000 per claim and treble damages. Unfortunately, the ACA does not define “identified.”
The Centers for Medicare & Medicaid Services (CMS) attempted to define the term by issuing a proposed rule in February 2012
. However, CMS announced this past February that it would delay finalizing the rule for at least a year because of the complexity of the issue and the volume of comments it had received, much of them opposed to CMS’s proposed definition.
On Aug. 3, the U.S. District Court for the Southern District of New York weighed in on the matter. Its decision in U.S. ex rel. Kane v. Continuum Health Partners, Inc. et al. is the first to interpret the ACA’s 60-day rule. In its decision, the court concluded that awareness that overpayments likely existed triggered the 60-day clock. This means that a 60-day time frame begins when a physician has established the mere possibility of overpayments.
Thankfully, the court also concluded that its ruling should not be read to create FCA liability in the case of a physician who is diligently working to investigate a potential overpayment and has not returned the overpayment within 60 days, as long as the physician can establish that he or she did not intend to withhold repayment once he or she established the amount to be repaid. The court stated that “it is only when an obligation is knowingly concealed or knowingly and improperly avoided or decreased that a provider has violated the FCA. Therefore, prosecutorial discretion would counsel against the institution of enforcement actions aimed at well-intentioned healthcare providers working with reasonable haste to address erroneous overpayments.”
Consequently, if you discover the possibility that an overpayment exists, you should work diligently to uncover the scope of the problem and make the necessary repayments without unnecessary delay, preferably within 60 days of when you are aware of the possibility of an overpayment. Likewise, you should promptly investigate reports of potential overpayments and ensure the investigation is well-documented.
More information on the court’s decision and its implications for physicians is available online
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
Posted on Aug 25, 2015 by David Twiddy