January 12, 2016 Articles

On the Clock: Failure to Timely Refund Overpayments Leads to FCA Exposure

The silence breaks over section 6402(d) of the PPACA.

By Anna Grizzle, Brian Roark, and Julia Tamulis

Among the many changes under the Patient Protection and Affordable Care Act (PPACA), few have generated as much discussion as section 6402(d), requiring health care providers to report and return any overpayment within 60 days of the date the overpayment is “identified” or risk liability under the False Claims Act (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 recently as federal courts issued a ruling defining what it means to “identify” an overpayment and publicly announced a settlement resolving an FCA action based on a provider’s failure to refund credit balances. Both cases, along with the imminent release by the Centers for Medicare & Medicaid Services (CMS) of a final rule addressing the 60-day repayment requirement, demonstrate the importance of providers exercising due diligence in promptly reviewing and addressing potential overpayment situations.

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