Healthcare Provider Pays Millions in First Major Overpayment Settlement

On August 4, 2015, the Department of Justice announced that Pediatric Services of America and some of its related entities have agreed to pay $6.88 million to resolve overpayment False Claims Act allegations. Pediatric Services of America provides pediatric home care services to fragile children. According to the allegations, Pediatric Services of America which includes Pediatric Services of America Healthcare, Inc., Pediatric Home Nursing Services (collectively “PSA”) and Portfolio Logic LLC, did not properly disclose and return overpayments to the Government. Additionally, it filed claims for home nursing care without proper documentation and submitted claims overstating the length of time its staff provided services. Many of the credit balances were never ingestigated and some were carried on its books for many years. This resulted in overpayment to the company. This case makes it clear that healthcare providers are responsible to investigate credit balances to determine whether they are in fact overpayments.

This is the first settlement under the False Claims Act involving a health care provider’s failure to investigate credit balances on books to determine whether they resulted from overpayments made by a federal health care program. Under section 6402 of the Affordable Care Act, health care providers must report and return any overpayments by the later of (i) 60 days after the overpayment was identified or (ii) the date any corresponding cost report is due (if applicable).

“The health care system is trust-based, and providers who willfully ignore their fiscal responsibilities will be held accountable for their actions,” said Derrick L. Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta.

Recently the United States Department of Justice intervened in a whistleblower complaint filed in the Southern District of New York involving Continuum Health Partners in United States ex. Rel. Kane v. Continuum Health Partners, Inc. et al (Civil Action No. 11-2322(ER). The Department of Justice complaint contends that the defendants did not return Medicaid overpayments within 60 days after the date on which it is identified or any corresponding cost report was due, if applicable, as required by the Affordable Care Act.

Nolan Auerbach & White believes that the Department of Justice is sending a clear message that it will enforce overpayments and go after those who do not properly fulfill their obligations by failing to disclose and refund overpayments. Whistleblowers are needed with inside information to continue to expose those who improperly conceal or avoid their responsibilities under the law.

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