Detecting Reverse False Claims

In 2009, Congress extensively amended the FCA, and added a reverse false claims provision, making it a violation to “knowingly conceal” or “knowingly and improperly avoid” an obligation to pay or transmit money to the government. In 2010, the Affordable Care Act went on to add a requirement that any Medicare or Medicaid overpayment must be reported within 60 days after the date on which the overpayment was identified. Any overpayments not reported after this time may create CMP liability and can be a violation of the FCA, resulting in treble damages and steep fines.

Medicare Overpayment

CMS defines an overpayment as “any funds that a person has received or retained under” Medicare “to which the person . . . is not entitled.” It requires the person to report and return any overpayments that have or should have been identified by the “exercise reasonable diligence” standard in accordance with CMS instructions. 

It is important to distinguish between an “improper payment” or overpayment and a violation of the FCA, Anti-Kickback Statute (AKS), Stark Law, CMP laws, or other applicable laws. An improper overpayment pertains to a payment that was received in error, whether the error was made by the provider or the government. For example, if a routine revenue reconciliation shows that the MAC made duplicate payments for a series of claims, that is a reportable overpayment. On the other hand, if a provider became aware of the overpayment and failed to report it within 60 days, that becomes a violation of the False Claims Act. Generally, overpayments are reported to CMS and potential violations of law are reported to the OIG.

Counsel and the compliance officer must take a proactive approach to overpayments and educate appropriate staff to identify and promptly report any overpayment to the compliance officer or senior management. Counsel should be used or engaged to oversee the reporting and repayment of any overpayments. The process for reporting overpayments is set by CMS and it differs greatly from the HHS-OIG Provider Self-Disclosure Protocol described below.

Medicare Refunds

CMS requires that any overpayments must be reported within 60 days using an applicable claims adjustment, credit balance, or self-reported refund. The report of an overpayment is generally made to the applicable Medicare Administrative Contractor, and the provider generally has six to eight months to fully identify and refund any overpayments. If the client is unable to make the refund, it is important to contact the CMS contractor immediately to make arrangements. The overpayment lookback period is six years.

The Michigan Medicaid Provider Manual sets out the process for reporting and refunding any overpayments at section 12.4 – it simply requires documentation of the overpayment and a check for repayment. 

Chapman Law Group is a multi-state health care law firm.  For 35years, we have defended the rights of health care professionals, providers, and corporations involved in the delivery of healthcare at all levels. We handle claims involving False Claims, Anti-Kickback, Stark, Civil Monetary Penalty, DEA Controlled Substance Act violations, compliance-related issues including Medicare, Medicaid, and private pay, OIG investigations, audits of all types, professional licensing, state and federal criminal charges, civil and administrative actions, peer review and credentialing issues, HIPAA compliance, and much more involving health care professionals. We believe the dedicated men and women who provide health care deserve an exceptional defense when their integrity and actions are called into question.

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