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The First False Claims Act Involving the Affordable Care Act (ACA) 60 Day Repayment Rule

By: Valerie Shahriari

While the False Claims Act (FCA) has been in existence for years, many providers do not know that the rule was extended in 2010.  As part of the Affordable Care Act (ACA), Congress created the “60 Day Rule” and extended the False Claims Act liability to health care providers who fail to report and return overpayments within 60 days of identification if that overpayment came from a federal program (i.e., Medicare and Medicaid).  United States ex rel. Kane et al. v. Healthfirst, Inc., et al (Case No. 1:11-cv-02325) (S.D.N.Y. August 3, 2015) is the first case in which the federal government intervened on an alleged violation of the 60 Day Rule. 

The Healthfirst case is important as it clarified one of the ambiguities of the 60 day rule.  Congress enacted the ACA, and CMS issued its proposed rule implementing the 60 day rule.  However, the proposed CMS rule has not been finalized.  Up until now, certain ambiguities continued with this rule, in particular the meaning of “identified” as used in the 60 Day Rule.  According to Healthfirst, an overpayment has been “identified” when a provider is put on notice of a potential overpayment, even if the exact details of the overpayment are yet to be determined.

What does this ruling mean for providers?  This ruling impacts your practice and puts you on notice when you identify the potential overpayment related to a Medicare or Medicaid payment.  This notice starts running once the potential overpayment is identified and not when the details are finalized.  Once the clock starts clicking, you then have an obligation to pay the overpayment within 60 days.  If the payment is not reported and paid within 60 days, the provider has not satisfied the obligation and in fact, violated the FCA.