Failing to Return Medicare or Medicaid Overpayments Can Result in Huge False Claims Act Liabilities

The Patient Protection and Affordable Care Act requires that overpayments from Medicare or Medicaid be reported and returned to the government within 60 days after the overpayment is identified.  Overpayments that are not timely reported and returned will be treated as false claims under the False Claims Act, which could result in liability for three times the amount of the overpayment plus penalties.

The Centers for Medicare and Medicaid Services (CMS) has published proposed rules that would consider an overpayment to have been “identified” if the provider has actual knowledge of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment.  Reckless disregard or deliberate ignorance would include a failure to make a “reasonable inquiry” after a significant increase in Medicare revenue when there is no apparent reason for the increase. 

Other examples of when an overpayment will be considered “identified” include when a provider of services or supplier:

• reviews billing or payment records and learns that it incorrectly coded certain services, resulting in increased reimbursement;
• performs an internal audit and discovers that overpayments exist;
• learns that services were provided by an unlicensed or excluded individual on its behalf;
• learns that a patient death occurred prior to the service date on a claim that has been submitted for payment; or
  
• is informed by a government agency of an audit that discovered a potential overpayment, and the provider or supplier fails to make a reasonable inquiry. (When a government agency informs a provider or supplier of a potential overpayment, the provider or supplier has an obligation to accept the finding or make a reasonable inquiry.)

Failure to timely report and return overpayments could result in enormous damages and penalties.  The proposed rules would allow the government to recover overpayments that were not timely reported and returned within the prior 10 years.  Under the False Claims Act, a provider would be liable for three times the amount of the overpayments plus a penalty of $11,000 per claim.

Whistleblowers who help the government recover overpayments by commencing qui tam actions can be paid up to 30% of the amount recovered by the government, with an average payout of approximately 17% of the amount recovered.

If you believe that your employer is failing to return overpayments to Medicare, Medicaid, or another government health care program, then you should consult with an experienced lawyer immediately.    To schedule a free initial consultation by telephone or in person, call my office today at (917) 652-6504 or click here to communicate with me via email.

John Howley
New York, New York

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