ACA Reporting and Repayment Mandates are a Real Minefield for Medicare Providers.

(July 9, 2010): Does the failure to promptly return a Medicare overpayment really warrant liability under the False Claims Act (FCA)? Congress thinks so. The Patient Protection and Affordable Care Act (also known as the "Affordable Care Act" or "ACA") creates an obligation under the FCA whereby a Medicare provider who fails to timely report and refund and overpayment may be subject to substantial penalties and damages. Section 6402 of the ACA requires Medicare providers, including physicians and partial hospitalization providers, among others, to a) return and report any overpayment, and b) explain, in writing, the reason for the overpayment. This law creates a minefield for physicians and other Medicare providers. First, providers have only 60 days to comply with the reporting and refund requirement from the date on which the overpayment was identified or, if applicable, the date any corresponding cost report is due, whichever is later. Of course, the ACA does not actually explain what it means to “identify” an overpayment. Nonetheless, the ACA reporting and repayment requirement an “obligation” under the FCA. Pursuant to the Fraud Enforcement and Recovery Act of 2009 (FERA) amendments to the FCA, an individual or entity may be liable if he or it “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” Thus, providers who fail to meet their 60 day “obligation” may be subject to monetary penalties of up to $11,000 per claim, and treble damages.