The FCA and Overpayments: 'Kane' Creates New Risks for Healthcare Providers

By: Jacqueline C. Wolff
– New York Law Journal

Healthcare providers that treat Medicare and Medicaid patients regularly face a quandary: What should they do when faced with the possibility that they may have been overpaid by the government for their services? Overpayments could result from innocent coding errors stemming from confusion over complex billing rules. Or they could result from a physician committing fraud by knowingly prescribing medically unnecessary procedures. Since 2010, the law has been clear that providers are required to pay back overpayments within 60 days of being identified, or else risk liability under the False Claims Act (FCA). 31 U.S.C. §3729 et seq.

But what is not clear is when the 60-day period starts to run. Does it begin when the provider learns of a possible overpayment, for example from a disgruntled employee who claims that services billed were medically unnecessary? Or does it begin only once the provider has confirmed there has been an overpayment? How much money, time and energy must a provider spend investigating, especially if the government is itself investigating the overpayment? And how promptly must the provider complete the investigation?

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