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August 4, 2015

04 August 2015

District Court Denies Motion to Dismiss in Government’s Groundbreaking Overpayment Suit

On August 3, Judge Ramos of the Southern District of New York denied the motion to dismiss of defendant hospitals (“Continuum”) accused of failing to timely return overpayments in violation of the FCA.  See U.S. ex rel. Kane v. Continuum Health Partners, Case No. 11-2325 (S.D.N.Y. Aug. 3, 2015).  In a decision that provides the first significant judicial guidance on the FCA’s overpayments provision, the court held that the statutory sixty-day clock to repay “identified overpayments” begins running “when a provider is put on notice of a potential overpayment, rather than the moment when an overpayment is conclusively ascertained.”  As such, the decision portends potentially expansive FCA liability for failing to remediate overpayments promptly.

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