Department of Justice Obtains $400k Settlement Based Upon Failure to Timely Repay a Known Overpayment

Posted on Firm News by Robert Nicholson

On October 13, 2017, the Department of Justice announced a False Claims Act settlement with First Coast Cardiovascular Institute, a Florida based health clinic, under which the practice will pay $448,821.58 for failing to timely refund $175,000 in overpayments to Medicare, Medicaid, TRICARE, and the Department of Veterans Affairs. The settlement is noteworthy because it is an example of a False Claims Act settlement based upon a violation of the 60-day repayment rule for identified overpayments irrespective of whether the underlying claims were intentionally overbilled.

The case was brought by a former employee under the qui tam provisions of the False Claims Act.  The employee, who was hired by First Coast as the Executive Director in April 2015, brought the issue to the President and Board of Directors. According to the Complaint, the relator made multiple attempts between May 2015 and February 2016 to correct the overbilling problems internally, but no actions were taken to refund any of the payments.

The Complaint in the case acknowledged that the claims in issue were not intentionally false, but resulted from multiple payments being received from primary and secondary payers, and that the overpayment was “a normal occurrence in the healthcare field”.  However, that fact did not absolve the practice of the requirement to repay the government programs for the overpayments.  Under the Affordable Care Act and associated regulations, a Medicare provider has 60 days to investigate and repay an identified overpayment or risk the claims in issue becoming actionable under the False Claims Act.  Under the False Claims Act, the provider becomes responsible for treble damages and penalties, not merely a single damages repayment of the overpayment.

The healthcare law firm of Nicholson & Eastin, LLP regularly assists clients with evaluating potential overpayment matters, as well as False Claims Act cases.  Please do not hesitate to contact us for assistance with either type of matter.