Government Alleges that Mental Health Facility Violated False Claims Act by Knowingly Retaining Medicaid Overpayments

According to the government’s complaint-in-intervention, a Chattanooga mental health facility violated the False Claims Act when it wrongfully retained an overpayment from Medicaid. In July 2011, the facility called State Medicaid officials to determine whether it could bill for both a per diem charge and a 15-minute service charge for services provided to the same Medicaid patient on the same date of service. When a Medicaid official supposedly responded that such billing practices would, in effect, double-bill Medicaid, the facility kept the overpayment.

Soon after, an employee of the facility alerted the government to the alleged problem by filing a Medicaid fraud qui tam lawsuit, and ultimately received a percentage of the recovery from the mental health facility (a whistleblower reward).

Under the amended “Reverse False Claims” provision, healthcare providers violate of the False Claims Act when they knowingly pocket an overpayment of government healthcare dollars. A provider that receives an overpayment is required to report and return the overpayment within 60 days from the date that the overpayment was identified or by the date a corresponding cost report was due, whichever is later. Any overpayment retained by the provider after that deadline constitutes Medicare fraud and is reachable by the False Claims Act.

More information for whistleblowers is located at the Nolan Auerbach & White website.