Update on Deadline to Refund Overpayments To Avoid Draconian Penalties

You’re undoubtedly familiar with the concept of the federal False Claims Act (FCA). It’s a Civil War era statute that makes it a crime to make fraudulent claims for payment to the United States government. Penalties are three times the amount of the improper payment plus up to $11,000 per claim.

People are generally less familiar with the concept of a “reverse false claim.” Essentially, it makes it an FCA violation to conceal or to knowingly and improperly avoid or decrease an obligation to pay or transmit money or property to the federal government. In the usual healthcare context, we’re talking about not returning overpayments from Medicare, Medicaid and other federal programs. Keeping a couple of dozen $20 overpayments turns into a $265,440 FCA judgment.

The Accountable Care Act added an additional twist to the duty to repay overpayments: They must be repaid within 60 days of the “date on which the overpayment was identified.”

But when does that 60-day period begin to run? The statute didn’t say and neither did any regulation.

Earlier in 2015, a federal court issued the first opinion on when the 60 days starts…and it’s early.

I wrote about this in a blog post, Hospital Turns $1 Million Of Collections Into $24 Million Of Potential False Claims Act Liability. The bottom line is that it starts to run immediately upon your receipt of credible information that there’s been an overpayment.

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