What healthcare providers should know about reverse false claims

The Department of Justice and the New York Attorney General's Office have intervened in a first-of-its kind federal False Claims Act lawsuit against Continuum Health Partners, Inc. The case alleges that the hospital system knowingly failed to refund Medicaid overpayments after identifying them. For insights on the significance of this case as Affordable Care Act enforcement unwinds, FierceHealthCare spoke to Leslie J. Levinson during an exclusive interview.

Levinson (pictured), an attorney, is a partner and chair of the healthcare practice in the New York office of Edwards Wildman Palmer, LLP. He concentrates his practice on transactions for clients in the healthcare and life sciences industries.

FierceHealthcare: How has the Affordable Care Act amended the False Claims Act in terms of reverse false claims and why is that change significant to healthcare providers?

Les Levinson: The Affordable Care Act clarified that an overpayment that is not reported and refunded within 60 days after the date the overpayment was identified becomes an obligation to pay for purposes of the False Claims Act. And the reason why that's particularly significant is this: If the overpayment becomes an obligation to pay under the False Claims Act, it could subject the provider to monetary penalties and treble damages. This has ratcheted up and brought that particular aspect of the law into high focus.   

FHC: What can you tell us about current regulations by the Centers for Medicare & Medicaid Services on this topic? Do the regulations include guidance on when an overpayment is considered identified and when the 60-day clock starts ticking?

Levinson: CMS put out a set of regulations in 2012 that have not yet become final. CMS tried to give some guidance as to how to go about calculating the 60-day clock and when the obligation to make a repayment would ripen. The key issue here is when the overpayment was identified for purposes of starting the 60-day clock.

There's commentary in the proposed rule speaking to the notion that when a provider has enough  information giving reason to believe that an overpayment may have been made, an obligation is created for the provider to make a reasonable inquiry to see if an overpayment exists. If that inquiry reveals that an overpayment occurred, then the provider has 60 days to report and return the overpayment.

As I mentioned, CMS has not yet finalized those regulations. We in the healthcare community are looking for more clarity, for a more of a bright line test if we can get it. The case we're about to talk about will hopefully give some impetus to that or perhaps prompt CMS to finalize the regulations. For now, we're dealing in a bit of grey area.         

FHC: Why is the pending False Claims Act case in New York against Continuum Health Partners important to watch?

Levinson: We hope the case will provide more judicial clarity about when an overpayment has been identified and therefore give providers an opportunity to discern when it is that they have to repay that overpayment to the government. We're hoping this case will provide some sense of when the 60-day clock starts.

This case was just recently filed, but I think most of us in the healthcare industry are looking with great interest to see what will come out of it. Obviously the facts and circumstances of any case are unique; but this is the only case I'm aware of that's been filed under this particular factual scenario.

FHC: Do you think the reverse false claims amendment may result in new types of whistleblower complaints? Why or why not?

Levinson: It's an interesting question. To the extent that you have overpayments that are identified and are not repaid, I certainly think the amendment will give whistleblowers some additional ammunition to bring these kinds of cases. I think this may increase the number of whistleblower complaints that we have and will probably provoke different kinds of whistleblower cases than we've had in the past.

FHC: What should healthcare providers be doing to monitor their reimbursements for overpayments?

Levinson: It's always been important to have good compliance plans, procedures and protocols in effect; but in light of these rules and the direction we're moving in, it's very important that every healthcare provider ensure that its compliance plans are not only tailored to the provider but also include all appropriate policies and procedures for monitoring payments. If there's been an inkling of a potential overpayment, there should be a mechanism for investigating and dealing with it. This is becoming more important every day.

FHC: What should healthcare providers do if they think they may have been overpaid by a government health insurance program?

Levinson: Providers should certainly be in contact with their counsel and other professionals who assist them. Healthcare laws can sometimes be vague and difficult to navigate. So it's very important to make sure you're dealing with trusted advisors to help you interpret your facts as they may apply to the particular situation and make sure you're responding in an appropriate manner.

If you need to conduct an investigation, it's important that you do it properly and thoroughly. And whatever result the investigation yields, providers should take appropriate steps to follow-through on the investigation's conclusion.

FHC: Do you have any other insights on this topic not covered in the preceding questions?

Levinson: It's another indication of the evolution of our healthcare system that government inquiries and activity will heighten and continue to be important. Responsibilities on healthcare providers are going to increase as years go by, so it's important for providers to be vigilant, thoughtful and complete as they provide care and seek reimbursement for it.

Editor's note: This interview was edited and condensed for clarity.