Among the many changes under the Affordable Care Act (ACA), few have generated as much discussion as Section 6402(d), requiring healthcare providers to report and return any overpayment within 60 days of the date the overpayment is “identified” or risk liability under the FCA for a “reverse” false claim. Providers have grappled with how and when this provision would be applied as enforcement agencies have largely remained silent in offering an interpretation. This silence changed last week as a federal district court issued a ruling defining what it means to “identify” an overpayment followed by the public announcement of a settlement resolving an FCA action based upon a provider’s failure to refund credit balances.  Both cases demonstrate the importance of providers exercising due diligence in promptly reviewing and addressing potential overpayment situations.

On August 3, 2015, the U.S. District Court for the Southern District of New York offered the first judicial interpretation of the ACA’s 60-day rule, siding with DOJ’s interpretation of  “identified” in U.S. ex rel. Kane v. Healthfirst, Inc. et al., No. 1:11-cv-02325 (S.D.N.Y.).  And, on August 4, 2015, the day following the Kane decision, providers of pediatric home nursing services reached a joint FCA settlement in two whistleblower cases, U.S. ex rel. Odumosu v. Pediatric Servs. of Am. Healthcare, N.D. Ga., No. 1:11-cv-1007, and U.S. ex rel. McCray v. Pediatric Servs. of Am. Healthcare, S.D. Ga., No. 4:13-cv-127. The FCA settlement is the first settlement of its kind based upon a healthcare provider’s failure to identify potential overpayments.

Our full discussion of these cases and the implications for healthcare providers can be found here.