Mount Sinai's legal battle could have ramifications for other health systems, according to Shannon DeBra and Beatrice Nokuri, healthcare attorneys with Bricker & Eckler.
The federal government is auditing providers more to ensure Medicare and Medicaid payments are appropriate. While this provision of the healthcare reform law attempts to incentivize providers to conduct more self-audits, providers may worry that previous repayments will be subject to government scrutiny, they noted.
“The suit is one of the first of its kind in applying the new provisions under the ACA and makes it clear that the government plans to strictly enforce not only the repayment rules under the FCA, but also the 60-day rule under the ACA,” they said in a July review of the case.
Mount Sinai filed a motion to dismiss the whistle-blower case Monday in U.S. District Court in New York City. According to the initial complaint (PDF), two hospitals within Continuum Health Partners, which has since merged with Mount Sinai, submitted improper Medicaid claims to a managed-care insurer in 2009 and 2010 due to electronic coding errors.
Robert Kane, the whistle-blower who filed the suit and had worked as Continuum's hospital revenue-cycle director, alerted Continuum to the wide-scale problem in early 2011. An internal audit showed New York's Medicaid program wrongly paid about $1 million for about 900 claims.
Continuum returned all of the questioned Medicaid overpayments to the government. However, the lawsuit, which the U.S. Justice Department joined this past June, alleges that Continuum did not repay all of the claims within the two-month period mandated by the ACA. The final refunds weren't made until March 2013—more than two years after the health system was made aware of the overpayments. Additionally, the suit said repayments for 300 of the claims were made only after the government issued a civil investigative demand, essentially a subpoena.
Mount Sinai wants the case thrown out for two main reasons, according to its legal filing (PDF) Monday. No evidence exists that the former Continuum hospitals “knowingly concealed or knowingly and improperly avoided” repayments, which must be shown in False Claims Act suits. Also, the alleged violations would require retroactive application of a newer law, Mount Sinai contended.
The DOJ is seeking the maximum penalty of $11,000 per delayed improper claim plus treble damages, which would cost Mount Sinai about $30 million. System officials were not available for further comment.
Follow Bob Herman on Twitter: @MHbherman
