UPDATE: U.S. Government Opts to Intervene in New York False Claims Act Case Against Continuum Health

Earlier this year, we reported on a False Claims Act case filed in the State of New York under its state level False Claims Act, which was then joined by the New York Attorney General’s Office. The case, which involves Continuum Health Partners and affiliated Mt. Sinai Health System, has generated a great deal of concern over the notion of “reverse” false claims – and has now generated the interest of the federal Department of Justice. Late last month, the Department of Justice opted to intervene on certain portions of the lawsuit in an attempt to further expand its prosecution and recovery of healthcare-related false claims – which are inexorably plaguing state and federal healthcare agencies across the U.S.

Background of ‘Reverse’ False Claims

We are all familiar with the concept of traditional healthcare false claims. These often involve illegal “upcoding,” or billing for services never rendered. In a newly-emerging fraudulent trend, reverse false claims are becoming more apparent and causing agencies like Medicare and Medicaid to lose significant amounts of money due to healthcare facilities’ refusal to refund overpayments.

In general, a reverse false claim occurs when a medical office or hospital bills for a device or procedure and receives an accidental overpayment from Medicaid, Medicare, or any other government-backed healthcare agency. Under 31 U.S.C. § 3729(a)(1)(G) of the False Claims Act, a wrongfully withheld overpayment triggers False Claims Act liability if the overpayment is not returned within 60 days – a deadline imposed by the Affordable Care Act. Of course, as with any allegation of fraudulent false claims, the government and/or plaintiff must be able to show that the knowingly withheld the payment, as mere oversights or accounting mistakes will not always suffice to establish liability.

DOJ’s Position Against Continuum

Fighting reverse false claims is a relatively new endeavor for the DOJ and its Healthcare Fraud Prevention and Enforcement Action Team (H.E.A.T.) task force, which is a group convened to identify, investigate, punish, and deter healthcare fraud. One issue giving rise to considerable confusion within the realm of FCA liability and reverse false claims involves the inquiry of when precisely does the 60-day period begin to run? According to the ACA and its interpretation, the 60-day period begins once the facility has “identified” the overpayment, which can often take months in larger hospitals or medical offices.

In the case against Continuum, thousands of claims were submitted for reimbursement by the New York Medicaid managed care plans that were not consistent with the actual services and treatment performed. The allegations against the health system do not contend that the original submissions were anything more than a computer glitch; however, the whistleblower contends that the defendants’ refusal to return the overpayments for a period spanning at least one year amounts to a wrongful reverse false claim. According to the complaint filed by the Department of Justice, Continuum “knowingly concealed and knowingly and improperly avoided or decreased an obligation to pay or transmit money or property [back] to the Government.”

The case amounts to one of the first “reverse” false claims cases in which the federal government has opted to intervene, and it will be interesting to follow the outcome of the matter to determine the breadth of possible False Claims Act liability for medical professionals engaged in the intentional withholding of government overpayments.

Contact a Reputable Whistleblower Attorney Today

If you are aware of possible issues with medical billing procedures pertaining to Medicaid, Medicare, or other government-backed healthcare agencies, contact us today to consider a possible False Claims Act case.