Category — False Claims Act

On February 14, 2010, CMS issued a Proposed Rule to implement the Affordable Care Act’s requirement that any person who receives a Medicare or Medicaid overpayment report and return the overpayment within 60 days of the date on which the overpayment was identified or the date of any corresponding cost report due, if applicable.  The Proposed Rule would apply only to Medicare Part A and Part B providers and suppliers.  CMS plans to issue further guidance for other stakeholders, including Medicaid managed care organizations and Prescription Drug Plans.  CMS proposes to require providers to report and return overpayments identified within ten years of the date the overpayment as received.

Under the Proposed Rule, CMS will consider a provider to have identified an overpayment if it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment.  CMS provided several examples of reckless disregard or deliberate ignorance, including a provider’s failure to make a “reasonable inquiry” when it experiences a “significant increase in Medicare revenue and there is no apparent reason” to be of the existence of an overpayment. 

CMS proposes to require providers and suppliers to report and return overpayments through existing reporting processes that Medicare Administrative Contractors (MAC) currently administer.  Under the proposed “self-reported overpayment refund process,” Medicare providers and suppliers would report overpayments using forms that each MAC makes available on its website.  CMS stated that it plans to develop a uniform reporting form in the future. 

Comments on the proposed rule are due by April 16, 2011.

A major theme in the Patient Protection and Affordable Care Act (PPACA) of 2010 (Pub. L. No. 111-148)[1] is combating fraud and abuse in the health care industry.  One key provision in PPACA is destined to have a significant impact on the False Claims Act (FCA),[2] which has long been a highly effective tool used by the government to prosecute suspected health care fraud.  Specifically, the massive new health care reform law includes a wholesale rewrite of the public disclosure provision of the statute—a provision that is often invoked by FCA defendants seeking to dismiss qui tam relators.  Although the amendment is not as radical as some legislative proposals introduced in Congress over the past two years, it significantly narrows the circumstances in which defendants can obtain dismissal of qui tam actions that are based on public disclosures.

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