OIG Releases 2017 Work Plan

On November 10, 2016, the Office of Inspector General (“the OIG”) of the U.S. Department of Health and Human Services (“DHHS”) released its 2017 Work Plan.  Published annually and updated throughout the year, the Work Plan identifies the OIG’s key areas of focus as it carries out its mission of protecting the integrity of programs within DHHS.  The OIG is charged with ensuring the integrity of more than 100 programs administered by DHHS, including those within the Centers for Medicare and Medicaid Services, Center for Disease Control and Prevention, the Food and Drug Administration, and the National Institute of Health. The OIG Work Plan summarizes the OIG’s current activities – comprised of both new and revised activities — along with information regarding previously identified activities that have been completed, postponed, or cancelled.

The Work Plan highlights new and continuing priorities applicable to various provider types, including hospitals, nursing homes, hospices, home health, clinical laboratories, physicians and other health professionals, medical equipment suppliers and manufacturers, pharmaceutical manufacturers and other providers and suppliers.

The 2017 Work Plan is available here.

The following is a sampling of some of the new and ongoing efforts highlighted in the Work Plan:

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Amanda Hayes

Amanda Hayes

Amanda Hayes counsels clients in connection with mergers and acquisitions, divestitures and other business matters, with a particular focus on the health care industry. She regularly serves as lead counsel on acquisitions and divestitures, guiding the client through deal structuring, due diligence, drafting, negotiation and closing. In addition to health care, Ms. Hayes’ mergers and acquisition experience includes a variety of industries, such as manufacturing, retail, automotive, contract research, environmental remediation, engineering and construction supply.

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Do You Know the 60-Day Rule? You Better…

Ask healthcare providers if they have an obligation under the law to report and repay overpayments made by a government payor like Medicare or Medicaid, and you almost always will receive an enthusiastic “yes.”  However, many providers are not aware that a lesser-known provision in the Affordable Care Act (“ACA”) creates specific liability under the Federal False Claims Act if a provider fails to disclose or refund Medicare and Medicaid overpayments within 60 days after the date the overpayment is identified.  This requirement means exactly what it says.  Once an overpayment is identified, the clock starts ticking, and the provider has 60 days to repay the funds or face False Claims Act liability.

False Claims Act actions can be very costly because they come with a penalty that ranges between $5,500 and $11,000 on each claim for which the provider failed to return funds.  For example, if you discover that you were overpaid for 25 Medicaid claims and failed to report and repay the funds within 60 days, you could be subject to a penalty of 25 times $11,000 or $275,000.  This is true even if those 25 claims only amounted to $500.00.   Providers also can be subject to treble damages, meaning the actual recoupment could be increased by three times the amount paid.  The government has the authority to enforce the False Claims Act, however unlike most laws, the Federal False Claims Act also allows outsiders, such as current or former employees to file a qui tam action on behalf of the government and receive between 15% and 30% of any recovery or settlement.

A key question that a provider should ask when considering the 60-day repayment and reporting requirement:  what does it mean for an overpayment to be “identified”?  In 2012, CMS clarified its interpretation of “identify.”  The proposed regulation defines “identify” to mean the date a person has actual knowledge of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment.  CMS commented that, when a provider receives information regarding a possible overpayment, it has an obligation to make a reasonable inquiry with “deliberate speed” to determine whether there was an overpayment.  Thus, under CMS’ interpretation of the law, if the provider conducts an investigation of potential overpayments with deliberate speed, the 60-day time period for reporting and returning any overpayment begins at the conclusion of the provider’s investigation determining there was in fact an overpayment.  In contrast, if the provider receives information that an overpayment may have occurred and fails to make a reasonable inquiry, the 60-day repayment/reporting window starts on the date the provider received the information that the possible overpayment existed.

Because the calculation of the 60-day timeframe hinges on conducting an investigation with deliberate speed, providers should make sure that they have a policy in place that requires their employees to document the steps they are taking to investigate the alleged overpayment.  Providers should also have a clear chain of reporting, so that potential overpayments do not sit on an employee’s desk for weeks or months without inquiry.

Although there is little case law interpreting how this provision will be applied, a False Claim Act lawsuit was recently filed in New York against a large provider that had identified an overpayment and repaid the funds to the federal government.  The basis of the lawsuit is that the provider failed to report and repay the identified overpayment within 60 days. Although this case has not been decided by a court, it is telling that federal prosecutors joined the lawsuit.  This indicates that the government believes that the affirmative duty to repay within 60 days is important and will be enforced through the False Claims Act.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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