A recent False Claims Act (“FCA”) settlement involving an allegedly overpaid Florida medical practice reaffirms the interplay between the 60-Day Overpayment Statute and the FCA, but also highlights the importance for all providers and suppliers to report and return overpayments, regardless of the source of federal funds.
According to the Department of Justice (“DOJ”), First Coast Cardiovascular Institute (“FCCI”) allowed credit balances from various federal health care programs to accrue despite multiple internal warnings that the balances should be paid back. DOJ alleged that FCCI’s failure to return those credit balances within 60 days violated the FCA. DOJ’s comments are notable, however, because the credit balances not only involved Medicare and Medicaid, but also TRICARE and the Department of Veterans Affairs, both of which are outside the scope of the 60-Day Overpayment Statute. DOJ and FCCI resolved the alleged $175,000 in unreturned overpayments for a $448,821.58 price.
The settlement serves as a reminder for providers and suppliers about the risks associated with unreturned overpayments and the potential scope of the FCA’s reverse false claims provision. While the Affordable Care Act (“ACA”) established the 60-Day Overpayment Statute in 2010 to require recipients of Medicare and Medicaid funds to report and return overpayments within 60 days, Congress amended the FCA in 2009 to apply to “the retention of any overpayment.” Therefore, while the ACA’s 60-day requirement does not apply to TRICARE and the Department of Veterans Affairs, the FCA’s reverse false claims provision separately requires such providers and suppliers to identify, report, and return overpayments diligently.
Although there are no regulations that describe how TRICARE and Department of Veterans Affairs providers and suppliers should report and return overpayments, the regulations promulgated pursuant to the 60-Day Overpayment Statute for Medicare participants offer guidance. The 2014 Final Rule informs Medicare Advantage organizations in Part C and Prescription Drug Plan Sponsors in Part D of their obligations to report and return overpayments; the 2016 Final Rule delineates the responsibilities of Medicare providers and suppliers to report and return overpayments arising under Parts A and B. Thus, providers and suppliers billing TRICARE and the Department of Veteran’s Affairs should seek to comply with the 60-Day Overpayment Statute and its implementing regulations to mitigate any potential liability under the FCA.
We will continue to monitor developments in this area, and we will link to the FCCI settlement agreement as it becomes publicly available.