As a result of an August 3, 2015 federal court decision, nursing homes and other health care providers that participate in Medicare or Medicaid are well-advised to pay careful attention to the law that requires report and return of any overpayment within 60 days of the date on which the overpayment is “identified.”  In Kane v. Healthfirst, Inc. et al., the Southern District of New York found that the word “identified” means the date on which a provider is “put on notice” that a claim may have been overpaid.  The court said that providers cannot delay commencement of the 60-day period until the overpayment amount has been definitively determined.

The defendants in the case had argued that simply being on notice of a potential overpayment was not enough to trigger the 60-day repayment rule, which was a provision in the 2010 Affordable Care Act.  While recognizing the burden on providers to bring to conclusion a thorough and definitive investigation of a potential overpayment within 60 days, the court was firm in its finding, referring to the “demanding standard of compliance.”  However, there was a suggestion that prosecutorial discretion could act to assist a provider that did not comply with the letter of the law but acted diligently to attempt to determine an overpayment amount within the required timeframe.

This case, triggered by a former employee of one of the  provider defendants under the False Claims Act whistleblower provision, is important because it is the first time there has been a court opinion addressing the meaning of the term “identified” as used in the law.  Draft regulations published in 2012 have not been finalized.