While medical practices are generally aware that relators and the government pursue allegations of false or duplicative claims to federal health care programs, a recent settlement reflects a growing trend of False Claims Act (FCA) allegations concerning the failure to report and return identified overpayments. On October 13, 2017, the US Department of Justice (DOJ) announced that it had reached a $450,000 settlement with First Coast Cardiovascular Institute, P.A. (FCCI) of Jacksonville, Florida in a qui tam lawsuit alleging that FCCI failed to promptly return identified overpayments from federal health care programs after the overpayments came to the attention of the practice’s leadership. According to DOJ, FCCI accrued credit balances or overpayments—a common occurrence in instances where two insurers share responsibility for payment—from Medicare, Medicaid, TRICARE and the Department of Veterans Affairs, totaling more than $175,000. DOJ alleged that, despite repeated warnings, FCCI failed to pay back the overpayments until it learned that the United States had opened an investigation. While the total dollar amount of the settlement is relatively small compared to other FCA resolutions, the application of a 2.5x multiplier of single damages is on the high end, reflecting nearly the full amount of trebling provided for under the FCA.

The relator alleged that—in his capacity as an Executive Director at FCCI starting in 2015—he became aware of unreported overpayments spanning several years. The relator alleged that he notified FCCI’s chief financial officer (CFO) and later reported his finding to the practice’s Board. The relator’s amended complaint alleged that he continued to raise the issue of overpayments, but that FCCI’s management repeatedly refused to even discuss the issue.

Pursuant to Affordable Care Act’s amendments to the Social Security Act in 2010, a health care provider has sixty days from the date it identifies an overpayment to report and return the funds. See 42 USC 1320a-7k(d); 42 CFR 301-305 (relating to Medicare Part A and B payments). Under the FCA, there is a cause of action for knowingly concealing or knowingly and improperly avoiding returning identified overpayments. See 31 USC 3729(a)(1)(G). While FCCI did not admit liability as part of the settlement, the significant financial penalty signals that the government will continue to aggressively pursue such claims, and that medical practices are not immune to prosecution.

The case is captioned The United States of America et al v. First Coast Cardiovascular Institute, P.A., Case No. 3:16-cv-1054 (M.D. Fla.).