Failure to Repay Can Result in FCA Case

A blue door with two small holes in it.

There’s nothing wrong with holding on to money for as long as you can before giving it back, is there?

Well, if you’re a medical practice and you delay repaying overpayments owed to the government, then it can get you in some hot water.

That’s what happened to First Coast Cardiovascular Institute, P.A., a Jacksonville, Fla.-based practice that agreed to pay nearly $449,000 to resolve allegations that it violated the federal False Claims Act and the Florida False Claims Act, by knowingly delaying repayment of more than $175,000 it owed to Medicare, Medicaid, TRICARE and the Department of Veterans Affairs, according to a news release from the U.S. Attorney’s Office for the Middle District of Florida. The defendant owns and operates at least ten medical offices throughout Florida.

The investigation began with a whistleblower complaint filed by First Coast’s former executive director Douglas Malie, who began working for the company in April 2015. According to the complaint, he noticed “almost immediately†that the practice’s financial records, did not reflect a credit balance for overpayments. It was alleged he notified the CFO as well as the president and board of directors, but that his requests for clarifications about the overpayments were “ignored†or “deflected,†over a one-year period, according to the complaint.

Instead, First Coast reported the overpayments as cash or assets in its monthly revenue reports to “inflate or disguise†their financial status,†the complaint reads.

The government, which intervened for the purposes of the settlement, alleged that the practice accrued credit balances or overpayments and, despite repeated warnings, failed to pay back the money until the Department of Justice opened an investigation.

As we reported in February 2016, the Centers for Medicare & Medicaid Services published a long awaited final rule requiring Medicare Parts A and B healthcare providers and suppliers to report and return overpayments by the later of the date that is 60 days after the date an overpayment was identified, or the due date of any corresponding cost report, if applicable.

A separate final rule was published in May 2014 that addresses Medicare Parts C and D overpayments.

The government is making it clear that it will not tolerate such behavior as evidenced by the statement from Acting U.S. Attorney Stephen Muldrow: “This settlement should send a message that we will aggressively pursue those who seek to unjustly profit from our nation’s federal health care programs.â€

The case should serve as a reminder that regardless of whether intentional fraud was involved, failure to repay overpayments in a timely manner can result in false claims damages. Healthcare practices would be well-advised to promptly evaluate any information relating to potential overpayments and to take action immediately to avoid FCA liability.

The Healthcare Offices of Anthony C. Vitale may be able to assist you. If you have any questions or concerns, feel free to contact The Health Law Offices of Anthony C. Vitale at 305-358-4500 or email us at

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