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S2 | MONDAY, SEPTEMBER 28, 2015 | White-Collar Crime
| NYLJ.COM

FCA Overpayments:
The and

BY JACQUELINE C. WOLFF
AND ARUNABHA BHOUMIK
New Risks H
‘Kane’ Creates ealth care providers that treat Medicare
and Medicaid patients regularly face a
quandary: What should they do when
faced with the possibility that they may have
For Health Care Providers
been overpaid by the government for their
services? Overpayments could result from

innocent coding errors stemming from confu-
sion over complex billing rules. Or they could
result from a physician committing fraud by
knowingly prescribing medically unnecessary
procedures. Since 2010, the law has been clear
that providers are required to pay back over-
payments within 60 days of being identiied,
or else risk liability under the False Claims

Act (FCA). 31 U.S.C. §3729 et seq.
But what is not clear is when the 60-day
period starts to run. Does it begin when the
provider learns of a possible overpayment,
for example from a disgruntled employee who
claims that services billed were medically
unnecessary? Or does it begin only once the
provider has conirmed there has been an
overpayment? How much money, time and

energy must a provider spend investigating,
especially if the government is itself investi-
gating the overpayment? And how promptly
must the provider complete the investigation?
In a recent case of irst impression, U.S. ex rel.
Kane v. Continuum Health Partners, No. 11 Civ.
2325, 2015 WL 4619686 (S.D.N.Y. Aug. 3, 2015),1
Judge Edgardo Ramos directly addressed these
issues. By taking an expansive view of what

constitutes “identiication” of an overpayment,
Kane has signiicantly expanded the scope of
potential FCA liability for health care providers.

Statutory Background

Enacted during the Civil War, the False
Claims Act, 31 U.S.C. §3729 et seq. was

intended to combat the scourge of govern-
ment contractors defrauding the govern-
ment by iling fraudulent claims for payment.
The FCA allows the government, or private
whistleblowers (called “relators”), to sue to
recover the monies wrongfully paid out. If

K
JACQUELINE WOLFF is co-chair of the corporate inves- OC
tigations and white-collar defense group at Manatt, GST
Phelps & Phillips. ARUNABHA BHOUMIK is co-chair of BI
the irm’s false claims act group.

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Kris Fischer, Editor-In-Chief
BY JOHN T. ZACH
For Economic Crimes
AND RANDALL W. JACKSON
BY JAMES GLASSER
Angela Turturro, Sections Editor
BY MARK S. COHEN
AND JENNY CHOU
Agnieszka Czuj, Design
AND SCOTT WILCOX
S

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