In 2009, Congress strengthened the False Claims Act so that employees and the government could bring an action against a provider that knowingly retained an overpayment of government funds. The following year, Congress inserted a provision into the Affordable Care Act, which gave providers a 60-day window to report and repay any identified Medicaid or Medicare overpayment.
U.S.A. ex rel. Kane v. Healthfirst, Inc., the Government alleges in its Complaint-in-intervention that certain New York hospitals failed to refund Medicaid overpayments within 60 days of identifying them. According to the Complaint, beginning in 2009, the New York Department of Health Comptroller’s Office allegedly made an inquiry of Defendants regarding a small number of claims that were erroneously submitted for reimbursement. As a result of the inquiry, Defendants undertook an internal investigation to determine the reasons for the improper claims and the scope of the problem. By 2011, Defendants had allegedly identified more than 900 claims erroneously submitted to Medicaid, leading to over $1 million wrongfully paid by Medicaid as a secondary payor. According to the Government’s Complaint, Defendants allegedly delayed repaying the majority of these claims for more than two years and that repayments were made only after further pressing by the Comptroller’s Office.
This intervention decision sends another message to healthcare providers that they cannot sit on improper payments. Congress has empowered the Government to pay substantial rewards to qui tam relators who step forward and bring a successful action.