False Claims Liability Based on “Overpayments”
Organizations that bill the government must ensure that the billing is done accurately, or they may be subject to liability, not only for the amount that was overbilled and therefore overpaid, but for treble damages, plus statutory damages for each false claim.
If a company bills Medicare based on incorrect codes and results in higher payment received, the government has six years to find that overpayment. If it does, it can reclaim the amount overpaid, multiplied by three, with an additional significant penalty.
This exposure is compounded by the fact that any “whistleblower” can either notify the government and be rewarded, or bring a lawsuit against the organization, prove the overpayment, and collect a portion of what the government recovers.
This means that any employee who is terminated, laid off, or has a grievance against the organization, can report any overpayment or sue the organization himself as both a plaintiff and witness to prove the overpayment. They may have gathered proof of the overpayment while employed, and later, when they are laid off or terminated, bring the action and collect a substantial portion of what the government recovers plus attorney fees! 
This is a risk that any organization cannot dare overlook.
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Legal Definition: The False Claims Act (FCA)
The False Claims Act (FCA)  prohibits knowingly submitting false or fraudulent claims, or knowingly avoiding an obligation to transmit money to the government. The penalty for violation of the Act is treble damages and between $11,180 and $22,000 in penalties for each false claim.
The FCA applies to any dealings with the government, whether as a contractor, medical provider, or any other organization that submits a claim for payment by the government. 
The Supreme Court established a framework for the types of noncompliance that can lead to FCA liability.  The defendant must knowingly fail to comply with a requirement, and the misrepresentation must be material to the government’s payment of the claim. Additionally, if the defendant knows that the government, absent compliance, will refuse to pay the claim and the government does not actually know of the noncompliance and pay anyway, it is material to the government decision.
Suits By Whistleblowers
The FCA’s key provision permits a qui tam by a “relator” -a private person- on behalf of the United States.  The suit is against an individual or company that has knowingly presented a false or fraudulent claim for payment to the government.  The FCA encourages insiders to disclose fraud by awarding a successful qui tam plaintiff a portion of any judgment, plus reasonable attorneys fees and costs. 
The employee has inside knowledge about the employers billing techniques and therefore serves both as a plaintiff and a witness against the employer.
Claims under the FCA often arise after an employee is terminated. A qui tam action under the FCA, alleging that the employee knows of improper billing by his employer or about an overpayment, is sometimes added to a wrongful termination lawsuit.
Presenting False Records
There can also be a claim for presenting false records. To establish a cause of action under False Claims §3729(a)(1)(B), it must be shown that the defendant knowingly made, used or caused a false record or statement material to a false or fraudulent claim. This means that the first step is to show that there is a false claim. 
Failure to Return Overpayment Creates FCA Liability
There is a “reverse false claims” provision under the FCA which creates liability if a defendant conceals or avoids an obligation to pay or transmit money to the government, and requires that there be a false claim in the first place. The false claim must be proven to show that the overpayment exists. The Centers for Medicare and Medicaid Services (CMS) calculates payments based on diagnosis codes and the organization submitting the data must provide “accurate, complete, and truthful” data.
Organizations have a financial incentive to exaggerate enrollees’ health risks by reporting diagnosis codes not supported by the enrollee’s medical records. Each organization must certify that its data is accurate, complete, and truthful. 42 CFR §422.504 (I E), (L) (two).
The organizations must use “due diligence” to make sure the data is accurate and truthful. This is not just a reactive investigation, but a proactive investigation. Organizations must routinely evaluate the data submitted to ensure it is accurate and complete, and then required to report and return overpayments. It need not be shown they had actual knowledge of the existence of an overpayment, as long as the overpayment gets identified.
An overpayment would be the result of, for instance, making a billing record which has an incorrect medical diagnosis code not supported by the medical record and receiving a payment based on that record. 
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The 60-Day Rule for Returning Overpayment
Specific provisions set requirements for identifying and reporting overpayments and is considered an obligation under the FCA, which can create liability for penalties.
The 60-day rule  requires that all identified overpayments be returned, regardless of the amount; there is no minimum monetary threshold. When the person has determined they have received an overpayment through the use of “reasonable diligence” and quantified the amount, they have “identified” the overpayment. “Reasonable diligence” means proactive compliance activities, so monitoring the appropriateness and accuracy of claims is required.
A reactive investigation is required once credible information of a potential overpayment is received. Once a single overpaid claim is identified, further investigation must be conducted to quantify the amount. The 60-day time period starts once a reasonably diligent investigation is completed or on the day the provider receives credible information of a potential overpayment. The provider typically must complete the investigation within six months from receipt of credible information of an overpayment; eight months is the maximum total time to return overpayments.
You can suspend the 60-day requirement for returning overpayments if you submit to the OIG  or CMS  protocols. It suspends repayment until a settlement agreement is executed. Self-disclosure to other agencies, like the Department of Justice or Medicaid fraud unit control, does not suspend the repayment deadline.
6 Year “Look Back” Period
The government has a six-year “look back” period. Once you have received an overpayment notification from the government, you have to investigate for related overpayments.
Motion For Summary Judgment
A motion for summary judgment may defeat an FCA claim. The relator must have evidence and present it to the court from which a reasonable jury could find there was (1) a false claim for payment, or (2) knowing retention of an overpayment.
Implied certification is when a defendant submits a claim for payment, and the defendant “impliedly certifies compliance with all conditions of payment.”  To impliedly certify compliance there must be a relevant “statute, rule, regulation, or contract” that serves as a condition of payment.
The court will perform a careful analysis and may see failure to comply with an express condition of payment.  What matters most is if the defendant knowingly violated the requirement, and the defendant knew that the condition was material to the government payment decision. 
In other words, there can be an implied certification when (1) the claim makes specific representations about the goods or services provided; (2) the defendant omits critical qualifying information. To defeat a motion for summary judgment, the plaintiff must present evidence that there was a misrepresentation about compliance that was material to the government payment decision.
This is a rigorous requirement, a demanding standard. The FCA is not for punishing breach of contract or violations of regulations, and cannot be used where the noncompliance is minor or insubstantial. There may be hundreds of legal requirements under a contract, and a violation of minor provisions is not necessarily false or fraudulent.
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In 2018, the Department of Justice reported $2.8 billion in recoveries under the False Claims Act, with $2.5 billion involving the healthcare industry including drug and medical device manufacturers, managed-care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians.
Most, $2.1 billion, of the recoveries, were from the 645 qui tam whistleblower actions. The government paid out $301 million to the individuals who exposed the fraud and false claims by filing these actions.
For the claim to overcome a motion for summary judgment, it must meet the demanding proof requirements for materiality set forth under Escobar. It’s not just whether a person knew the government could withhold payment or would be entitled to withhold payment. You can defeat the claim if you can show that the government regularly pays that type of claim despite actual knowledge that similar requirements were violated.