This summer, the United States Attorneys’ Office for the Southern District of New York announced a $2.95 million settlement with a group of hospitals due to their alleged willful delay in repaying over $800,000 in Medicaid overpayments. The settlement is the result of a lawsuit filed by a whistleblower alleging the hospitals violated the False Claims Act and the New York State False Claims Act.

As reported in the U.S. Attorneys’ press release, between 2009 and 2010, the hospital group, Continuum Health Partners, Inc., submitted claims for payment to Medicaid. In February of 2011, Continuum conducted an internal investigation and discovered that approximately 900 claims were erroneously submitted to Medicaid, totaling over $1 million. The list of erroneously paid claims was prepared by an employee of Continuum. Instead of repaying the improperly paid claims, Continuum fired the employee who reported the fraud. The employee went on to file the qui tam action which ultimately led to the $295 million settlement.

It is significant that Continuum did not reimburse Medicaid for the erroneously billing for over 2 years after the billing was discovered. Section 6402 (a) of the Affordable Care Act requires a person or organization who receives an overpayment to report and return the overpayment within 60 days from the date the payment was first identified. Continuum’s failure to timely report and return the overpayments led, in part, to the companies liability under the False Claims Act.

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Jason Cornell is an attorney who represents whistleblowers with the law firm Clark Fountain LaVista Prather Keen & Littky-Rubin. Clark Fountain represents plaintiffs in various matters throughout the United States. If you have questions regarding the issues addressed in this or other posts, you can reach Jason at 561 899-2111, or jcornell@clarkfountain.com.