Healthcare lawyers speculate that the recent $2.95 million settlement by New York City-based Mount Sinai Health System is the first in what could be a number of cases involving Medicaid overpayments, according to Bloomberg BNA.
The lawsuit alleged three of the system's hospitals unlawfully kept $844,000 in Medicaid overpayments, violating an Affordable Care Act requirement that Medicaid overpayments be returned within 60 days. CMS has released new guidance on the rule gives hospitals' six months to investigate a potential overpayment before the 60 day period begins.
In regards to the settlement, Frank Sheeder, a lawyer with Alston & Bird, told Bloomberg BNA, "Given the involvement of the Department of Justice, this case sets legal and regulatory precedent for how the federal government will enforce the ACA’s identified overpayment requirement."
Tony Maida, a lawyer with New York-based McDermott Will & Emery, specifically pointed to the fact that the CMS rejected the court's interpretation of what it means for a system to be informed of a potential overpayment.
"[The CMS] definition confirms that providers have the ability to take the time reasonably needed to review a potential issue to determine whether it both received an overpayment and to quantify the amount before the 60-day clock starts," said Mr. Maida.
Based on the CMS's clarification, Mr. Maida said the judge's opinion in the Mount Sinai case correctly confirms that missing the 60-day window does not itself establish an FCA violation. Instead, the government must also prove knowing concealment or knowing and willful avoidance or decreasing of the repayment obligation under the FCA's reverse false claims provision, according to the article.