Specifically, according to an April 28, 2010, legal analysis posted by McDermott Will & Emery (http://www.mwe.com), FERA amended the “reverse false claim” provision to say that an entity violates the FCA when it “knowingly and improperly avoids or decreases an obligation” to pay money to the United States. “Most notably,” they say, “the previously undefined ‘obligation’ necessary for a violation…is now defined as an established duty, whether or not fixed…arising from the retention of any overpayment.”


Meanwhile, back to the 60-day deadline, here’s what Section 6402 of the PPACA states:


An overpayment must be reported and returned by the later of one of the following:

  • The date that is 60 days after the date on which the overpayment was identified; or
  • The date any corresponding cost report is due, if applicable.


If you’re like many other providers, you first thought may be “60 days! That’s an awfully short time period.” Once that shock wears off, your next thought might be, “How are they defining ‘the date on which the overpayment was identified’?”


Attorneys David M. Glaser and Katherine A. Burkhart from Fredrikson & Byron http://www.fredlaw.com addressed this issue in an online article entitled New Medicare/Medicaid Refunding Requirement: Report and Return Within 60 Days of “Identification.” As they point out, the words “overpayment” and “identified” are the two key words of this new PPACA provision, and providers need to pay attention to these words.


“Many legal commentators suggest that under the new law hospitals and clinics must report and return an overpayment with 60 days of the first indication that an overpayment exists.” However, Glaser and Burkhart disagree, saying that the overpayment has not been “identified” until the provider has “(1) absolutely concluded that there is an overpayment and (2) ascertained the amount of the overpayment.”


In addition, “As long as you move expeditiously toward quantifying the overpayment, the 60-day time period applies AFTER the size of the overpayment is determined. In other words, you still have time to review records, complete any necessary statistical sampling, and perform other tasks that will allow you to determine the extent of the overpayment.”


Further regulations may be issued by the Department of Health and Human Services (HHS) to clarify this issue and, especially, to define the word “identified.” But, in the meantime, this appears to be another one of those proverbial gray areas in which healthcare providers must operate their businesses.


About the Author

Barbara Vandergrift, RN, BSN, MA, is a senior healthcare consultant with Medical Learning, Inc. (MedLearn®), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

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