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Settlement Talks Underway in First Case Interpreting the ACA’s 60-Day Repayment Provision

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The first known case interpreting the Affordable Care Act’s repayment provision, United States. ex rel. Robert Kane v. Healthfirst, was recently approved for settlement talks after the United Stated District Court for the Southern District of New York denied Healthfirst’s motion to dismiss.

Effective March 23, 2010, the Affordable Care Act requires health care providers to report and return an overpayment to Medicare or Medicaid within sixty days of identification.  The ACA also requires health care providers to submit a statement identifying the reasons for overpayment. The ACA authorizes civil monetary penalties of $10,000 per item or claim, as well as treble damages, for a provider who fails to report and return known overpayments.

In 2011, Healthfirst fired Kane four days after he circulated an email with a spreadsheet documenting over 900 improperly billed claims worth more than $1 million in potential overpayments. 

The United Stated District Court for the Southern District of New York denied Healthfirst’s motion to dismiss, holding that an overpayment is “identified” and the 60-day period to report and return the overpayment begins when a provider “is put on notice of a potential overpayment, rather than the moment when an overpayment is conclusively ascertained.” The False Claims Act, the Government’s primary tool in combating fraud against the government, plays a critical role in our health care system. The Federal Bureau of Investigation estimates that health care fraud costs American tax payers $80 billion a year.  Of this amount, $2.5 billion was recovered through the FCA’s qui tam provision in 2010.

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