Government demonstrates willingness to enforce Affordable Care Act provision that could cost providers millions of dollars

Government demonstrates willingness to enforce Affordable Care Act provision that could cost providers millions of dollars

Under a little-known provision of the Patient Protection and Affordable Care Act (“ACA”), healthcare providers could face millions of dollars in liability for failing to reimburse the government for overpayments in a timely manner.  Pursuant to this “reverse false claims” provision as amended by the ACA, providers now have only 60 days from the moment they identify an overpayment to reimburse the government.  While much has been written about this amendment, and many concerns have been raised by providers and commentators alike, the federal government has recently demonstrated its willingness to enforce this provision and hold providers to this 60-day standard.

In June 2014, the federal government joined a whistleblower lawsuit against Continuum Health Partners, which has since merged with one of New York City’s largest not-for-profit healthcare organizations, Mount Sinai Health System.  In this first-of-its-kind suit, the government alleges that Continuum received approximately $1 million in overpayments for 900 claims.  Because providers can face an $11,000 penalty for each claim multiplied by three, and because the government is seeking the maximum penalty here, Continuum could be on the hook for $30 million in damages – 30 times the amount of the alleged overpayments. 

Continuum returned all of the questionable payments.  However, according to the allegations in the suit, Continuum did not repay the claims for more than two years after a whistleblower “identified” them by noting his concerns in an email, and it only repaid certain claims after the government began formally investigating.  Continuum has filed a motion to dismiss, countering that the 60-day time limit did not begin to run until it had completed its own substantive investigation of possible overpayments.  Continuum also alleges that, even if it ought to have reimbursed the government more quickly, it did not “knowingly” conceal or “knowingly and improperly” avoid these repayments, as required by law (the federal False Claims Act in particular).  Finally, Continuum contends that the government is prohibited from applying the state law equivalent of the federal reverse-false-claims provision because it was not enacted until March 2013 – after the alleged overpayments were identified. 

This case demonstrates the federal government’s willingness to enforce the 60-day time limit even when a provider has reimbursed it for the overpayments.  The consequences can be significant.  Providers should take the necessary steps to cause their internal compliance programs to work as efficiently as possible to ensure that any potential overpayments are repaid as soon as possible.

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