On October 13, 2017, W. Stephen Muldrow, the Acting United States Attorney for the Middle District of Florida, announced that First Coast Cardiovascular Institute (FCCI) agreed to pay $448,821.58 to settle allegations that it knowingly delayed repayment of over $175,000 in alleged overpayments owed to federal healthcare programs in violation of the 60-Day Rule and the federal False Claims Act (FCA).

According to the allegations, FCCI improperly permitted credit balances to accrue from federal health care programs (such as Medicare, Medicaid, and TRICARE) despite multiple warnings to refund the overpayments. Such credit balances typically accrued when multiple insurers shared responsibility for paying a claim, but one insurer pays too much. The government alleged that FCCI learned about the potential overpayments to federal healthcare programs, but then failed to fulfill its legal obligation to report and return the funds within 60 days of identification.

The FCA was amended in 2009 to provide liability where a person or company knowingly conceals an obligation owed to the United States (commonly known as a “reverse false claim”). Additionally, the Affordable Care Act created requirements that a healthcare provider report and refund any overpayments from Medicaid and Medicare within 60 days of identification (known as the “60-Day Rule”). Although the 60-Day Rule expressly applies only to Medicare and Medicaid, the government nevertheless alleged that FCCI had a legal obligation to return any overpayment from all federal healthcare programs within 60 days, even though some of the credit balances affected TRICARE and the Department of Veterans Affairs. According to Monty Stokes, the Special Agent in Charge from the Office of Inspector General, U.S. Department of Veterans Affairs, “[t]his settlement will hopefully be a deterrent for others who consider similar practices.” Thus, the government’s investigation and settlement with FCCI demonstrates that the 60-Day Rule likely provides the best guidance on how healthcare providers should treat potential overpayments from federal healthcare programs, regardless of which specific program is involved.

The attorneys at Chilivis Grubman represent healthcare providers of all types and sizes in connection with government investigations and audits, and a wide variety of other regulatory and compliance matters, including those involving overpayments. For any questions, or if we can assist you in connection with a healthcare regulatory or compliance issue or audit/investigation, please contact us at (404) 262-6505 or sgrubman@cglawfirm.com.