Healthcare providers who participate in Medicare are sometimes surprised when the government later decides that an overpayment was made. As a healthcare provider who accepts federally funded reimbursement, you may wonder how long the government has to make a claim against you for alleged overpayments.
For Medicare overpayments, the federal government and its carriers and intermediaries have 3 calendar years from the date of issuance of payment to recoup overpayment. This statute of limitations begins to run from the date the reimbursement payment was made, not the date the service was actually performed. CMS has instructed carriers not to recover payments that have not been reopened (where no attempts have previously been made to collect) within 4 years from the date of payment, unless the case involves fraud or similar fault. CMS instructs carriers not to recover overpayments discovered later than 3 full calendar years after the year of payment, unless there is evidence that the physician or beneficiary was at fault with respect to the overpayment. Liability of the physician for refunding an overpayment is based on fault- if the overpayment was a result of a lack of disclosure or information from the Medicare beneficiary, the liability may shift to the beneficiary. See Medicare Carrier Manual §7100.
Healthcare providers should be aware that the 3 year statute of limitations does not apply to recovering overpayments made as result of false pretenses or fraud. In bringing a civil action against an alleged perpetrator of fraud for civil penalties, the Federal False Claims Act[i] grants the government and qui tam whistleblowers either (i) 6 years from the date of violation or (ii) 3 years from the date the facts material to the right of action are known or reasonably should have been known by the government , but not to exceed 10 years from the date of violation[ii]. When a “violation” has occurred is arguable. The statute of limitations under the Federal False Claims Act could potentially start to toll on the date the false claim is submitted, but the government has argued that the statute of limitations does not toll until the date of payment on the claim by the government or even final settlement on a cost report with the government. Also important to note is that failure to promptly refund a reimbursement previously discovered by a healthcare provider has been construed as a violation of the Federal False Claims Act. In other words, if you discover an overpayment and wait for CMS to make an official refund request, you may still be subject to penalties and fines.
Furthermore, aside from civil monetary penalties, there are numerous criminal statutes under which the federal government could impose criminal penalties for health care fraud, including obstruction of a federal audit, mail fraud, conspiracy to defraud the government, RICO, the criminal false claims act, False Statements Act, the Social Security Act (wherein it is a felony to render any false statement or representation of material fact), federal anti-kickback statutes, and HIPAA.
[i] The Federal False Claims Act can be found at 31 U.S.C. §§ 3729-3733.
[ii] 31 U.S.C. §3731(b).
With over 20 years of healthcare law experience following his experience as legal counsel for the Florida Medical Association, Mr. Cohen is board certified by The Florida Bar as a specialist in healthcare law. With a strong background and expertise in transactional healthcare and corporate matters, particularly as they relate to physicians, Mr. Cohen’s practice immerses him in regulatory, contract, corporate, compliance and employment related matters. As Founder of The Florida Healthcare Law Firm, he has distinguished himself and his firm for providing exceptional legal services with the right pricing, responsiveness and ethics. He can be reached at (888)455-7702 and www.floridahealthcarelawfirm.com