Thinking About Keeping Over-payments? Think Again

A recent settlement with the U.S. Department of Justice (DOJ) underscores the importance of repaying the government for overbilling.

Recently, the DOJ announced that First Coast Cardiovascular Institute, P.A. ("FCCI") agreed to pay a penalty of $448,821.58 to settle allegations that it failed to repay overpayments within 60 days of discovering the error. Whether or not the original overbilling was intentional or not is irrelevant. Some individuals reading this article may think "it's only approximately $449,000." Those individuals should think again because the amount of overpayments that FCCI retained amounted to $175,000. And, the settlement did not include attorneys' fees and costs to defend the allegations. Therefore, the cost to the practice was substantially more than if the claims were never submitted in the first place.

As a refresher, the "60-day Rule" emerged as an addition to the False Claims Act as part of the Affordable Care Act (ACA). The premise is based on the notion of a reverse false claim, whereby the provider retains overpayments and does not return them to the government. Although the reverse false claim has been available for decades, it came into prominence with the passage of the Fraud Enforcement and Recovery Act of 2009 ("FERA").

The 60-day Rule provides that failing to refund an overpayment to the government within 60 days of identification is a violation. Even if a provider "calls a penalty on themselves," the government still has the ability to bring a False Claims Act case on their own without a relator or whistleblower.

In FCCI's case, a former employee acting as a whistleblower filed a False Claims Act case in federal court in Florida. As the complaint alleged, between May 2015 and February 2016, the whistleblower attempted to raise concerns about the practice not following industry standards in dealing with overpayments. Specifically, issuing a credit on the provider's balance sheet and refunding the overpayment. Here, the overpayments were made by Medicare, Medicaid, TRICARE and the Department of Veterans Affairs. In essence, FCCI paid more than two and a half times the principal overpayment to settle the case.

The takeaways for physicians are as follows:

•Make sure that adequate policies and procedures are in place at your practice for preventing, detecting and correcting overpayments.

•Conduct an audit to make sure that the appropriate codes are being utilized and that medical necessity is being met at your practice.

• In the event of an overpayment, follow the 60-day Rule and report immediately. Failing to do so, as FCCI and other providers have discovered, can be costly.