When is an Overpayment Identified?

The Affordable Care Act (“ACA”) amended the False Claims Act (FCA) “reverse false claims” provision to include an obligation that providers report and return any overpayment within 60 days of identification.  However, the ACA did not define identification which has caused considerable confusion among health care providers.

In the recent whistleblower/false claims case of Kane v. Healthfirst, Inc., a federal district court judge has defined the term very narrowly, to mean that the overpayment is identified when the provider is “put on notice” rather than the moment when the overpayment is “conclusively ascertained.”

What does this mean for providers? 

This ruling reiterates the importance of responding and investigating quickly when potential compliance concerns are brought to the attention of a health care entity.  Failure to do so could result in allegations of false claims violations.

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