On August 3, the Department of Justice announced the first False Claims Act settlement of a case involving a health-care provider’s alleged failure to investigate, identify and refund overpayments from government programs, including Medicare, Medicaid and TRICARE.  Such claims (and settlements) may become more common given the recent amendments to the FCA in 2010, which provide that Medicare and Medicaid overpayments be reported and returned within “60 days after the date on which the overpayment was identified.” 42 U.S.C. §1320a-7k(d)(2).

The health-care provider agreed to pay $6.88 million as part of a global settlement of United States ex rel. Odumosu v. Pediatric Services of America, Inc. et al., No. 1:11-cv-1007 (N.D. Ga. filed March 30, 2011) and United States ex rel. McCray v. Pediatric Services of America, Inc. et al., No. 4:13-cv-127 (S.D. Ga. filed May 24, 2013).  These cases involved allegations that the health-care provider failed to disclose and refund overpayments for time that had been improperly rounded up and claims for services that had been improperly supervised.  The cases had been administratively closed earlier this year to provide the parties time to engage in extended global settlement negotiations.  In late July, the United States sought permission to have them administratively re-opened.  As part of their July 30 filing, the United States elected to intervene in part on claims that the health-care provider failed to return overpayments received from federally-insured health programs, knowingly submitted claims for services that were not reimbursable, and overstated the length of time of certain services.  The United States declined to intervene on the remaining allegations.  It attached a fully-executed copy of its settlement agreement with the health-care provider and noted that each of the “Plaintiff States” had executed separate settlement agreements resolving claims under their respective false claims statutes.