Understanding FCA Amendments for Reverse False Claims and the 60-Day Rule

Amendments to the False Claims Act for reverse false claims and the 60-day rule for Medicare and Medicaid expand the Act’s fraud detection. The False Claims Act (FCA) has been revised several times since its introduction in the mid-1980s to provide more robust protections for whistleblowers and additional avenues to halt deceptive schemes. Several states including North Carolina have adopted versions of the FCA to protect state programs from fraudulent acts. All of these efforts help deter overbilling, falsifying records, altering healthcare billing codes, and submitting incorrect invoices.

Let’s take a look at two of the latest amendments to this statute and the fraudulent actions these laws address.

In 2009, Congress amended the False Claims Act (FCA) to impose liability on reverse false claims, or knowingly failing to reimburse the government for overpayments. The U.S. code is 31 U.S.C. § 3729(a)(1)(G). This is known as the “reverse false claim” because it is the opposite of what the FCA was originally drafted to protect against, which was fraudulently induced payments. The government incentivizes whistleblowers to report either type of false claim.

Comparing § 3729(a)(1)(G), with § 3729(a)(1)(A)-(B) shows different ways people can be held liable for fraud under the False Claims Act and this amendment. Two main distinctions are:

• Nature of the Claim: Section G deals with entities avoiding payments owed to the government, while Sections A and B speak to false claims made to obtain payments from the government.
• Obligation: Section G obligates the fraudulent party to correct the situation by returning overpayments or avoiding fees once an issue is noticed.

The amendment for reverse false claims was strengthened a year later, in 2010, when Congress created a new Medicare and Medicaid regulation, known as the “60-day rule.” This rule controls precisely when overpayments become subject to the FCA. Under the 60-day rule, healthcare providers who are overpaid must report and return those funds to the government:

• Within 60 days after “identifying” the overpayment; or
• Within 6 years of getting an overpayment, generally known as the lookback period; or
• at the due date of any related cost report

The Centers for Medicare & Medicaid Services (CMS) have gone on to clarify what it means for overpayments to be “identified,” such as when a provider discovers or should have discovered the overpayment.

A hospital obtains interim payments from Medicare throughout the year and identifies overpayments in end-of-the-year reporting. The money overpaid must be submitted to the program within the timeline defined by Medicare’s 60-day rule to avoid liability under the FCA. Entities who ignore the overpayment in an attempt to defraud the government may face legal action. Any employee who detects this scheme and reports it to a Medicare fraud lawyer may be eligible for a reward and protection against retaliation.

Prior to these amendments, whistleblower claims under the FCA were largely based on submissions of false claims to the government for payment or the use of a false statement or record. These amendments provide the government additional opportunities to recover funds lost to fraud. They also offer whistleblowers more opportunities to combat Medicare and Medicaid fraud based on unreturned overpayments.

If you have questions about the False Claims Act, we’re here to help. Uncovering Medicare or Medicaid fraud requires legal help. Contact the whistleblower attorneys at Miller Law Group today for a free consultation.