It was bad enough when health care and human service providers learned that Medicare and Medicaid overpayments had to be reported and returned within 60 days of identification. Then came the Healthfirst decision that found that an overpayment has been “identified” when a provider has learned of a potential overpayment or “should have learned of it through reasonable diligence” even if the details of the overpayment are not known. Overpayments not reported and returned within the 60 day period are deemed false claims.
Then came the recent U.S. Supreme Court decision that held that providers could be liable under the False Claims Act under the “implied certification” theory; that providers certify to all material statutory, regulatory and contractual requirements every time they file a claim for reimbursement. Liability can be imposed even where no violation of conditions of payment have occurred if the provider “knew or should have known that the deficiencies would have caused a denial of payment”.
Finally if it could not get any worse for providers, the U. S. Department of Justice announced yesterday that penalties for False Claims liability were going to double. The Interim Final Rule raises the minimum per claim penalty from $5,500 to $10,781 and the maximum per claim penalty from $11,000 to $21,562. The increased penalties will apply after August 1, 2016 for those whose violations occurred after November 2, 2015. The Department is providing a 60 day period for public comment on the Rule.
The combination of these three legal events heightens the risk for providers trying to determine within a 60 day window whether in fact they have received an overpayment. To the extent that the provider wrongly concludes they do not have an overpayment or makes the disclosure outside of the 60 day window, the penalties, if finalized, could bankrupt many providers. For this reason among others, it is critical for providers to operate robust compliance programs that involve regular internal and external audits and encourage employee reporting of possible overpayments. Anything less is a high stakes gamble.
 U.S. ex. Rel. Kane, et. al. v. Healthfirst, Inc., et. al., 2015 WL 4619686 (S. D. N. Y. Aug. 3, 2015)
 University Health Services, Inc. v. U.S. et. al. ex rel. Escobar, et. al., 579 U.S. ___ (6/16/16)