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$2.95 million settlement of Mount Sinai overpayments -- are you next?

State and federal prosecutors just landed a big settlement on an overpayments case against a major hospital chain and associated companies -- and it shows that at least one court takes the 60-day repayment window very seriously. 

Companies controlling New York City's Mount Sinai Health System will settle "reverse False Claims Act allegations" to the tune of $2.95 million, New York State Attorney General Eric T. Schneiderman and U.S. Attorney for New York's Southern District Preet Bharara announced Wednesday.

The whistleblower case was brought by Robert P. Kane against Mount Sinai parent company Continuum in 2011. The complaint was later expanded to cover managed care organization (MCO) Healthfirst Inc. and joined by the U.S. Government.

In February 2011, plaintiffs alleged, Kane revealed to Continuum that "approximately 900 specific claims totaling over $1 million may have been wrongly submitted to and paid by Medicaid as a secondary payer."

That was caused by electronic remittances by Healthfirst, plaintiffs alleged, which "contained coding that erroneously indicated to the participating providers that they could seek additional payment from a secondary payer. As a result, the electronic
billing programs of numerous providers automatically generated bills to secondary payers, in particular Medicaid ..."

Continuum was not accused of ignoring the overpayments but of sending them back too slowly: They "failed to take steps to repay all of the affected claims within 60 days after these claims had been identified," said the complaint. "Final repayments were not made until March 2013, and repayments were made for more than 300 of the claims only after the government issued a civil investigative demand to Continuum concerning these payments in June 2012."

The defendants denied many related charges but admitted the remittance errors had "caused defendants to submit claims for payment above and beyond what they had received from the managed care organization, and that Medicaid paid these claims as a secondary payer."

The 60-day window for repayments is included in the Affordable Care Act but has been finalized in the Reporting and Returning of Overpayments rule in February. Let this case serve as a reminder that lawmen were not inclined to go easy on overpayment recipients before the final rule, and they certainly won't ease up now; also, that Part B News offers expert guidance on keeping your payments clear and dealing with payer "extrapolation" tactics in overpayment takebacks (subscription). 

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