In 2009, Congress amended the False Claims Act (FCA) to impose liability on those who knowingly fail to reimburse the government for overpayments. 31 U.S.C. § 3729(a)(1)(G). This is known as the “reverse false claim” because it is based on a failure to reimburse the government, rather than on fraudulently induced payments. Compare § 3729(a)(1)(G), with § 3729(a)(1)(A)-(B).
This amendment was strengthened a year later, 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 either (1) within 60-days after “identifying” the overpayment; or (2) at the due date of any related cost report; whichever is later. The Centers for Medicare & Medicaid Services (CMS) have gone on to clarify that overpayments “identified” once a provider discovers or should have discovered the overpayment.
Prior to these amendments, whistleblower claims under the FCA were largely based on (1) submissions of false claims to the government for payment; or (2) the use of a false statement or record. See 31 U.S.C. § 3729(a)(1)(A)-(B). Rather than identifying specific false claims, whistleblowers combatting Medicare and Medicaid fraud may now base a FCA lawsuit on overpayments that providers failed to return to the government.