Shelley R. Slade1
Vogel, Slade & Goldstein, LLP
In the Fraud Enforcement & Recovery Act of 2009 (FERA),2 Congress expanded the reach of the liability provisions of the federal False Claims Act (FCA)3 so that they now cover a health care provider’s “knowing” and “improper” retention of overpayments regardless of whether the provider makes a false statement to conceal the overpayment and regardless of whether the amount of the overpayment is fixed. The impact of this FCA amendment when applied in conjunction with a Medicare and Medicaid program integrity provision enacted on March 23, 20104 is that Medicare and Medicaid providers face potential FCA liability if they knowingly retain an overpayment after the due date for any corresponding cost report, or more than 60 days after identification of the overpayment, whichever is later.
After providing an overview of these new provisions, this paper addresses two questions:
i) As a practical matter, since many overpayments result from false claims, and given that the FCA has imposed liability for knowing, false claims since the 19th century, to what extent do these amendments expand the circumstances in which the Government may recover overpayments from health care providers?
ii) How are plaintiffs likely to utilize this amended provision to sue health care providers? What are the “new horizons” of the amended FCA?
1. The Law Prior to FERA
Prior to May 20, 2009, the FCA imposed liability on anyone who “knowingly makes, uses or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government.”5 Under the express language of the prior statute, retention of an overpayment gave rise to liability only if a party took an affirmative step to evade repayment through a false record or statement and only if the plaintiff established that repayment was an “obligation.” This provision became known as the “reverse false claims provision.”
The Government and the private qui tam bar have used the reverse false claims provision to recover from health care providers in various circumstances, including, among others:
i) Pharmaceutical companies making false statements about “best prices” to avoid paying monies owed under the Medicaid Rebate Statute6;
ii) Pharmacy benefit managers making false statements to insurance plans providing federal health insurance7
iii) Providers failing to refund Medicare for payments received from other payers; and iv) Medicare Part A providers making false statements on Credit Balance Reports (CMS Form 838). The payment obligation was created by the Medicare Rebate Statute in the first situation, by the contracts between health plans and the federal Government in the second, by federal regulation and the provider agreement in the third8, and by instructions to CMS Form 8389 in the fourth. Plaintiffs were limited in their ability to use the provision to recover in other circumstances largely because of the requirement of a false statement or record and ambiguity as to what Congress meant by the term “obligation.”
Prior to May 20, 2009, the FCA did not define the term “obligation.” The courts struggled to interpret the term. They resoundingly agreed that obligations that are contingent on the exercise of prosecutorial or administrative discretion, such as penalties imposed after a finding of wrongdoing, are not “obligations” within the meaning of the FCA10. The Government agreed, at least when it weighed in on the issue in 199111. The courts differed, however, on the question of whether the amount of a payment owed the Government had to be fixed through audit or otherwise before it could be considered an “obligation”.12 They conflated the questions of whether a duty was “fixed” and whether a duty was “established”.13 The Court of Appeals for the Fifth Circuit ruled that the term “obligation” included obligations of persons other than the person making the false statement or record; a company could be liable for making false statements that impaired another’s obligation to pay funds to the Government14. The Court of Appeals for the Third Circuit15 and several district courts held that the term “obligation” as used in the pre-May 20, 2009 FCA did not include retained overpayments absent a statutory, regulatory or contractual duty to refund the overpayments.16
The requirement of an affirmative false statement and the confusion in the case law as to the meaning of the term “obligation” permitted providers to engage in the sandbox game of “finders keepers.” Despite the Supreme Court’s admonition that those doing business with the Government must “turn square corners,”17 providers identifying overpayments in the millions of dollars could squirrel away the taxpayers’ money, complacent in the knowledge that the Government was unlikely to pursue them under the FCA so long as they discontinued the practices and didn’t make an affirmative false statement. Moreover, even when they did make a false statement to conceal the overpayment, they could always attempt to rely on a back-up argument that nothing in the law imposed an obligation to refund the overpayment. While these overpayment situations sometimes involved legally false claims, such as claims violating the physician self-referral law18 or the Medicare/Medicaid Anti-Kickback Statute19 in which fairly priced and medically necessary goods and services may have been provided despite the potential for abuse20 in other situations, providers had profited unduly at the taxpayers’ expense, receiving payment for miscoded or non-covered goods or services.
2. Changes in FERA
Faced with a deficit spiraling out of control, a perception of significant fraud in the financial markets, and a Medicaid/Medicare overpayment rate approaching 10 percent21. in 2009, Congress finally acted to close down this “free fraud zone.” In FERA, Congress amended the reverse false claims provision to add a clause imposing liability on anyone who:
knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government22.
Congress defined the term “obligation” as:
An established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of an overpayment23.
Through these amendments, Congress did away with the requirement of an affirmative false statement or record, and resolved the ambiguity surrounding the term “obligation” by specifying that the duty to pay funds to the Government had to be “established” but did not have to be “fixed” or “express.” In other words, while liability would not arise from a party’s efforts to avoid penalties when the decision to impose penalties was dependent on government discretion, liability could arise when the amount of the payment had not been finally determined and when the repayment duty was implicit in a relationship between the parties. In a report accompanying the legislation, the Senate Judiciary Committee explained that the new provision would include “fixed, unliquidated obligations” such as “tariffs on imported goods” and “contingent obligations” in which “there is a relationship between the Government and a person that ‘results in a duty to pay the Government money, whether or not the amount owed is yet fixed.’”24
Under the revised reverse false claims provision, a provider’s discovery that its practices have led to overpayments consequently can give rise to liability in the total amount of the overpayments regardless of whether they have been quantified. The amended provision imposes liability for obligations regardless of whether they are “fixed.” As stated by Congressman Berman, one of the authors of FERA’s FCA amendments:
Liability for all non-disclosed overpayment of the same type also should be imposed once an organization or other person is on notice that it has been employing a practice that has led to multiple instances of overpayment. For example, if a corporation learns after-the-fact that it has been violating a billing rule or a contract requirement in its billing, and it nonetheless fails to comply with a legal obligation to disclose the resulting overpayments, this amendment renders the corporation liable under the Act for all overpayments resulting from the violation of the billing rule or contract requirement, even those not specifically identified or quantified25.
These aspects of the new definition of “obligation” aligned the statute with prevailing case law. Prior to FERA, most courts that had considered the issue had concluded that the reverse false claims provision covered both fixed and unfixed (i.e., unquantified) duties to pay funds. The overwhelming weight of authority was that the term “obligation” in the prior statute included only “established” duties and did not include duties contingent on a government exercise of discretion, such as the discretion involved in levying penalties or fines.
Congress further clarified that the term “obligation” includes “an established duty . . . arising from . . . the retention of an overpayment.” Plaintiff’s counsel can be expected to take the position that, under the amended law, knowing actions to avoid repayment of an overpayment give rise to FCA liability regardless of whether a statute, regulation or contract expressly requires refund of the money. The new statutory definition of “obligation” specifically encompasses duties arising from “implicit” contractual and other relationships. Implicit in the contractual relationship between the United States and health care providers is a duty to return overpayments. As the United States has argued26 when a party receives unearned money from the Government as a result of a mistake of fact, equitable principles require restitution27. These principles have led the Supreme Court to hold that:
The Government by appropriate action can recover funds which its agents have wrongfully, erroneously, or illegally paid. No statute is necessary to authorize the United States to sue in such a case. The right is independent of statute28.
FERA’s legislative history supports this interpretation of the term “obligation.” While the Senate Judiciary Committee explained that an overpayment must be retained “improperly” before FCA liability will arise, it referenced only two conditions that must be met before retention of an overpayment would be deemed improper: i) failure to notify the Government, and ii) the expiration of any applicable period for reconciliation29
3. The Relevance of FERA’s Definition of “Obligation” for pre-May 20, 2009, Conduct
While FERA’s express terms provide that the definition of “obligation” does not apply to conduct preceding the date of FERA’s enactment (May 20, 2009)30, the definition provides the courts with an appropriate aid to interpret the earlier FCA’s reverse false claims provision. As the United States pointed out in a recently-filed amicus brief31, the Senate Judiciary Report emphasized that the False Claims Act needed to be “corrected and clarified” and specifically mentioned “confusion among the courts” with respect to the term obligation32. Moreover, the Senate Judiciary Committee emphasized that the new definition of “obligation”:
Reflects the Committee’s view, held since the passage of the 1986 Amendments, that an ‘obligation’ arises across the spectrum of possibilities from the fixed amount debt obligation where all particulars are defined to the instance where there is a relationship between the Government and a person that ‘results in a duty to pay the Government money, whether or not the amount owed is yet fixed.’33
“Subsequent legislation declaring the intent of an earlier statute is entitled to great weight in statutory construction.”34 Accordingly, FERA may embolden courts to impose liability for pre-May 20, 2009 reverse false claims even when the amount of the overpayment was not fixed and even when the duty to return the money did not arise from an express statutory, regulatory or contractual requirement35
4. Codification of Duty to Return Medicare and Medicaid Overpayments
Recent changes in Medicare and Medicaid’s program integrity provisions have rendered moot the potential debate about whether a Medicare or Medicaid provider has an “obligation” to return retained overpayments going forward. In 2010, Congress amended the Medicare and Medicaid program integrity provisions to codify a provider’s obligations when it has identified an overpayment36 Pursuant to the new provision, a provider must report and return an overpayment to the Secretary of the U.S. Department of Health & Human Services (HHS), the state, an intermediary, a carrier, or a contractor, as appropriate, by the later of 60 days from the date when the overpayment was “identified” or the date “any corresponding cost report is due.” The report to the governmental entity or agent must state the “reason for the overpayment.”37 Any overpayments retained after the statutory deadlines are deemed “obligations” within the meaning of the FCA38. The amendment defines an “overpayment” as “any funds . . . to which the person, after applicable reconciliation, is not entitled under such title.”39
EXPANSION OF LIABILITY
By eliminating the element of a “false statement” or “false record,” FERA significantly expands the misconduct for which a health care provider may be liable under the FCA. The Government now has an FCA remedy in many situations in which it would not have been able to sue the provider under the former reverse false claims provision or under the false claims and false statements liability provisions in 31 U.S.C. § 3729(a)(1)(A) and (B) and their predecessor provisions.
For one thing, the new “retention of overpayment” provision will save many FCA actions that otherwise would have been barred by the statute of limitations. Not only does the identification of the overpayment followed by improper retention of the money give rise to a new statutory “violation” for purposes of the FCA’s statute of limitations40, in addition, the provider may remain liable indefinitely for its illegal retention of overpayments. The “violation” that gives rise to this new liability may be a continuing one that persists for as long as the provider knowingly and improperly holds on to the taxpayers’ money.
In addition, providers may now be liable when they acquire knowledge of the falsity of claims after the claims’ submission, regardless of whether the provider makes a false statement or false record to conceal their repayment obligation. The following are examples of scenarios in which the scienter element could arise post-claim submission:
Modified Advice of Counsel. A Medicare Part B provider mistakenly submits false claims relying on an inaccurate opinion of counsel that is superseded post-claims submission by advice that the claims are false. The provider makes no false statements or records regarding prior compliance with the law or credit balances. Nonetheless, the provider knowingly is retaining overpayments and becomes subject to FCA liability if the overpayments are retained “improperly.”
Facts re Falsity Learned Post-Submission. A provider mistakenly submits false claims and only subsequently learns the facts indicating that the claims were false. The provider makes no false statements or records to conceal these problems. However, the provider is knowingly retaining overpayments and becomes liable under the FCA once the overpayments are retained “improperly.”
Facts re Falsity Consolidated Post-Submission. A provider mistakenly submits false invoices with no single person at the provider knowing that the claims are false, although the claims’ falsity is within the collective knowledge of provider personnel. After several years, an audit or other inquiry uncovers the problem, and the provider decides not to report or return the overpayments. No false records or statements are made. A qui tam case is brought in a district that follows the recent ruling by the D.C. Circuit that the “knowing” element of FCA liability may not be based on an organization’s collective knowledge41 The provider would not be liable for the initial submission of false claims but nonetheless faces liability for knowing and improper retention of overpayments.
Payments Diverted to Unauthorized Purposes. A claim may be accurate when made but become false when payments on the claim are diverted to unauthorized purposes. Failure to return the money to the Government could give rise to liability for improper retention of overpayments.
NEW HORIZONS: ILLUSTRATIVE USES OF THE NEW PROVISION
By way of example, the following illustrate several, specific fact patterns involving long-term care pharmacy providers — a provider type that is a relatively recent focus for law enforcement — that could give rise to liability under the new “retention of an overpayment” provision:
To bill Medicaid correctly, a national pharmacy chain develops sophisticated billing software to calculate its “usual and customary charge to the general public” (U&C charge) for each drug in each state on any given day, using the definition of U&C charge applicable in that state. When billing state Medicaid programs for medication, pharmacies may charge no more than their U&C charge42. State Medicaid programs have enacted definitions of U&C charge that differ in a number of ways, including with regard to whether prices to “third party” insurers must be taken into account and whether “usual and customary” means lowest, mean average, mode average (most frequent) or something else43. A bug in the pharmacy chain’s software program fails to ensure that the right U&C Medicaid charge is calculated for pharmacy sales to nursing homes located across a state border from the pharmacy, and as a result, in certain states, the pharmacy chain overcharges Medicaid. An internal audit uncovers the problem along with tens of millions of dollars in overcharges and overpayments; the pharmacy chain neither discloses nor returns the overpayments. Beginning 60 days after the audit findings, the pharmacy chain may be improperly retaining overpayments within the meaning of the revised FCA.
A pharmacy provides financial benefits to a nursing home that has agreed to use the pharmacy as its exclusive supplier of pharmaceuticals. When sued under the FCA on the ground that it submitted claims tainted by kickbacks, the pharmacy defends by producing a contemporaneous opinion from in-house corporate counsel that the financial transactions were not illegal kickbacks. However, disclosure of this opinion requires the pharmacy to disclose a later, much more thorough, legal analysis concluding that the transactions, in fact, violate anti-kickback law. Plaintiff may argue that the later advice effectively identified overpayments (the kickback-tainted claims) and that the pharmacy’s improper retention of these overpayments gave rise to FCA liability even if the pharmacy did not “knowingly” make false claims in the first instance.
A pharmacy chain’s corporate headquarters transmits prescription-dispensing software to member pharmacies without including an edit designed to catch illegal refills. State Medicaid rules strictly limit the number of prescription drug refills that Medicaid will cover44 Individual pharmacies in the chain use the software for six years before an internal compliance review identifies the improperly designed software program, and the problem is corrected. Six more years pass. At this point, some of the early false claims for illegal refills are more than ten years old, and the statute of limitations has expired on the pharmacies’ liability, if any, under Section 3729(a)(1)(A) for knowing submission of these false claims. Nonetheless, if the pharmacies improperly have failed to disclose and return the overpayments received on the illegally dispensed refills, the pharmacies may remain liable under Section 3729(a)(1)(G) for all damages from the retained overpayments, including those resulting from claims submitted twelve years ago. The compliance review that identified the overpayments took place within the FCA’s ten year statute of limitations; moreover, the courts may consider the company’s retention of overpayments to be a continuing violation.
The FCA’s new liability provision covering improper retention of overpayments, together with the Medicare and Medicaid regulation delineating the duty to refund overpayments, should contribute significantly to our nation’s effort to curb fraudulent and abusive health care billings. Huge swaths of misconduct that previously may have been considered outside the scope of the FCA have been swept within the ambit of the law. The Government may now be able to redress misconduct after the running of the statutes of limitations on liability under § 3729(a)(1)(A) and (B) or their predecessor provisions. The amendments to the reverse claims provisions are likely to significantly bolster voluntary repayments as well as the voluntary disclosure programs of the HHS Office of Inspector General and the Centers for Medicare & Medicaid Services as providers self-report to avoid this new liability.
1The author is a member of Vogel, Slade & Goldstein, LLP, a Washington, D.C. law firm with a nationwide practice representing qui tam plaintiffs in cases brought under the FCA and state false claims laws. She testified before the House Judiciary Committee in support of the FCA amendments included in FERA. The material herein may not be reproduced without permission of the author. ©
2P.L. 111-21, effective May 20, 2009.
331 U.S.C. §§ 3729 et seq.
4 42 U.S.C. § 1320a-7k, as added by the Patient Protection & Affordable Care Act (PPACA), P.L. 111-148, effective March 23, 2010.
5 31 U.S.C. § 3729(a)(7) (prior to May 20, 2009).
642 U.S.C. § 1396r-8.
7See, e.g., United States v. Caremark, Inc., 2011 U.S. App. LEXIS 3610 (5th Cir.); United States ex rel. Hunt v. Merck-Medco Managed Care, LLC, 336 F. Supp. 2d 430 (E.D. Pa. 2004).
8 See 42 C.F.R. 489.20(h) (“[I]f the provider received payment for the same services from Medicare and another payer that is primary to Medicare, [the provider must] reimburse Medicare any overpaid amounts within 60 days.”).
9The Secretary of the Department of Health & Human Services requires the Credit Balance Report under the authority of Section 1866(a)(1)(C) of the Social Security Act, 42 U.S.C. § 1395f(a).
10See American Textile Manufacturers Inst. v. The Limited, Inc., 190 F.3d 729, 736-38, 41 (6th Cir. 1999) (“Contingent obligations—those that will arise only after the exercise of discretion by government actors—are not contemplated by the statute. Examples of contingent obligations include those arising from civil and criminal penalties that impose monetary fines after a finding of wrongdoing: as opposed to quasi-contractual obligations created by statute or regulation (such as the imposition of a standard mailing rate), contingent obligations (such as the imposition of a civil penalty for an antitrust violation) attach only after the exercise of administrative or prosecutorial discretion, and often after a selection from a range of penalties”); accord United States ex rel. Marcy v. Rowan Co., 520 F.3d 384 (5th Cir. 2008); United States v. Am. Nat’l Red Cross, 518 F.3d 61, 66-67 (D.C. Cir. 2008); United States ex rel. Bahrani v. Conagra, Inc., 465 F.3d 1189, 1195 (10th Cir. 2006), cert. den. 552 U.S. 950 (2007); United States ex rel. Bain v. Ga. Gulf Corp., 386 F.3d 648 (5th Cir. 2004); United States v. Quick International Courier, Inc., 131 F.3d 770, 773 (8th Cir. 1997); United States ex rel. Lusby v. Rolls Royce Corp, 2008 U.S. Dist. LEXIS 69300 at *32 (S.D. Ind.), aff’d in part, rev. in part, 570 F.3d 849 (2009); United States ex rel. Connor v. Salina Reg’l Health Center, 459 F. Supp. 2d 1081 (D. Kan. 2006); Zelenka v. NFI Industries, 436 F. Supp. 2d 701, 704-06 (D. N.J. 2006), aff’d 260 Fed. Appx. 493 (3d Cir. 2008); contra United States ex rel. Sequoia Orange Co. v. Oxnard Lemon Co., 1992 U.S. Dist. LEXIS 22575, 1992 WL 795477, at *6 (E.D. Cal. May 4, 1992) (“Any false reports submitted by defendants to the Government with the effect that payment of forfeitures or fines to the Government were avoided, constitute false claims within the meaning of the reverse false claims provision of the Act”).
11Brief of the United States in United States ex rel. Sequoia Orange Co. v. Oxnard Lemon Co., CV. No. F-91-194 OWW. In this FCA lawsuit, Sequoia alleged that Oxnard submitted false reports to the Lemon Administrative Committee to avoid paying statutory forfeitures and assessments, and to ship more lemons than allowed by the Committee’s regulations. The United States argued that the qui tam plaintiff did not state a cause of action under the reverse false claims provision: “an attempt to circumvent an obligation to pay created solely as the result of a violation of an administrative enforcement statute does not constitute a cognizable claim under the Act.” “False claims submitted by individuals or entities seeking to avoid payment to the Government of administrative fines, penalties or forfeitures (OSHA, FAA, SEC, etc.), or criminal fines imposed pursuant to Title 18 of the United States Code, are not the stuff of False Claims Act lawsuits . . . .”
12Three Courts of Appeals held that to be actionable, an obligation need not be fixed in amount. See United States v. Bourseau, 531 F.3d 1159, 1170 (9th Cir. 2008), cert. den. 129 S.Ct. 1524 (2009); United States ex rel. Bahrani, supra, 465 F.3d at 1201-02; United States v. Pemco Aeroplex, Inc., 195 F.3d 1234, 1237 (11th Cir. 1999) (en banc). The Sixth and Eighth Circuits held to the contrary, with the Eighth Circuit’s decision made on facts involving potential fines or sanctions that arguably do not even rise to the level of an “established” duty, let alone a fixed duty. American Textile Manufacturers Inst., supra, 190 F.3d at 736-38; United States v. Quick International Courier, Inc., supra, 131 F.3d at 773-74.
13See, e.g., American Textile Manufacturers Inst., supra, 190 F.3d at 736-38, 41.
14United States v. Caremark, Inc., supra, 2011 U.S. App. LEXIS 3610 at * 25 (“If the Government is able to prove that Caremark knowingly made false statements to the States, knowing that these statements could cause the States to impair their obligation to the Government, Caremark will be liable under § 3729(a)(7)”);accord United States ex rel. Hunt v. Merck-Medco Managed Care, LLC, supra, 336 F. Supp. 2d at 444-45; United States ex rel. Koch v. Koch Indus., Inc., 57 F. Supp. 2d 1122, 1128-29 (N.D. Okla. 1999).
15United States ex rel. Quinn v. Omnicare, 382 F.3d 432, 444-445 (3d Cir. 2004) (court finds Omnicare not liable under reverse false claims provision for failure to credit Medicaid for returned medications in absence of clear regulatory requirement to do so).
16United States ex rel. Yannacopoulus v. General Dynamics, 636 F. Supp. 2d 739, 752 (N.D. Ill. 2009) (“retention of overpayment did not create an obligation under the former provisions of the FCA”); United States ex rel. Thomas v. Siemens, AG, 708 F. Supp. 2d 505, 514-515 (E.D. Pa. 2010) (following Quinn).
17Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 (1947); Rock Island, A & L.R. Co. v. United States, 254 U.S. 141, 143 (1920).
1842 U.S.C. § 1395nn.
1942 U.S.C. § 13201-7b.
20Pursuant to Section 6409 of the Affordable Care Act, enacted on March 23, 2010, the Secretary of the U.S. Department of Health & Human Services (HHS) may “reduce the amount due and owing for all violations of the physician self-referral statute [42 U.S.C. § 1395nn, the ‘Stark law’]” when providers self-disclose violations through the new CMS Voluntary Self-Referral Disclosure Protocol.
21In its Fiscal Year 2010 Agency Financial Report, HHS calculated and reported a 3-year (2008, 2009, and 2010) weighted average national payment error rate for Medicaid of 9.4 percent.
2231 U.S.C. § 3729(a)(1)(G)(2010).
2331 U.S.C. § 3729(b)(3)(2010).
24S. Rep. No. 111-10 at 14, citing Brief for United States, at 24, United States v. Bourseau, No. 06-56741, 06-56743 (9th Cir. July 14, 2008).
25Speech of Hon. Howard L. Berman, June 3, 2009, Congressional Record, E1295 at E1299.
26See, e.g., Brief for the United States as Amicus Curiae, at 20, United States ex rel. Yannacopoulos v. General Dynamics, No. 09-3037 (9th Cir.) (March 23, 2010), citing the “long-established principle of restitution that one is entitled to return of an overpayment or other benefit erroneously conferred on another as a result of a mistake of fact.”
272 Dobbs Law of Remedies § 11.7 (2d ed. 1993); see, e.g., Employers Ins. Of Wausau v. Titan Intern., Inc., 400 F.3d 486, 490-91 (7th Cir. 2005) (plaintiff has right to restitution of mistaken overpayment under Illinois law); Luby v. Teamsters Health Welfare & Pension Trust Funds, 944 F. 2d 1176, 1886 (3d Cir. 1991) (common law equitable principles require restitution of ERISA fund overpayments); United States v. Bedford Assoc., 713 F.2d 895, 903-04 (2nd Cir. 1983) (“Restitution is an equitable remedy that may be granted, in the sound discretion of the court, to prevent one party, at the expense of another, from retaining a benefit to which he is not entitled”); United States for and on Behalf of Sunworks Div. of Sun Collector Corp. v. Insurance Co. of North America, 695 F.2d 455, 458 (10th Cir. 1982) (“One who has been unjustly enriched at the expense of another may be required by law to make restitution”); ITT World Directories, Inc. v. CIA Editorial de Listas, 525 F.2d 697, 700 (2d Cir. 1975) (“person who has paid another an excessive amount of money because of an erroneous belief induced by a mistake of fact that the sum paid was necessary for the discharge of a duty, for the performance of a condition, or for the acceptance of an offer, is entitled to restitution of the excess”).
28United States v. Wurts, 303 U.S. 414 (1938); see Collins v. Donovan, 661 F.2d 705, 708 (8th Cir. 1981) (“A statute is not required to authorize the government to recover funds which its agents have wrongfully, erroneously or illegally paid”).
29In its report accompanying the legislation, the Senate Judiciary Committee explained:
. . The new definition of ‘obligation’ includes an express statement that an obligation under the FCA includes ‘the retention of an overpayment’ . . .
Thus, the violation of the FCA for receiving an overpayment may occur once an overpayment is knowingly and improperly retained, without notice to the Government about the overpayment . . . The Committee does not intend this language to create liability for a simple retention of an overpayment that is permitted by a statutory or regulatory process for reconciliation . . . any knowing and improper retention of an overpayment beyond or following the final submission of payment as required by statute or regulation—including relevant statutory or regulatory periods designated to reconcile cost reports, but excluding administrative and judicial appeals—would be actionable under this provision.
S. Rep. No. 111-10, 111th Cong., 1st Sess. at 15 (2009).
30See P.L. 111-21, § 4(f).
31Brief for the United States as Amicus Curiae, at 20, United States ex rel. Yannacopoulos v. General Dynamics, No. 09-3037 (9th Cir.) (March 23, 2010).
32S. Rep. No. 111-10, supra, at 4, 14 (2009).
33Id. at 14.
34Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 380-81 (1969).
35But see United States ex rel. Yannacopoulos v. General Dynamics, 636 F. Supp. 2d 739 (N.D. Ill. 2009), holding that FERA’s legislative history should not be consulted as an interpretative aid to the prior statute.
36See 42 U.S.C. § 1320a-7k(d) (added by the PPACA).
3742 U.S.C. § 1320a-7k(d)(1) and (2).
3842 U.S.C. § 1320a-7k(d)(3).
3942 U.S.C. § 1320a-7k(d)(4)(B).
40See 31 U.S.C. § 3731(b) (statute of limitations on § 3729 cause of action runs six years from the date of the “violation,” or three years from the date when government officials “charged with responsibility to act in the circumstances” learn or should know material facts relating to the violation, whichever is later, not to exceed ten years from the date of the violation.)
41United States v. Science Applications Int’l Corp., 626 F.3d 1257, 1269 (D.C. Cir. 2010).
42See 42 C.F.R. § 447.512(b), providing that state Medicaid programs receiving federal contributions may not pay more than a provider’s “usual and customary charge to the general public” for a pharmaceutical drug.
43Compare Conn. Provider Manual, Ch. 7, § 174.A.XXI, p. 3 (U&C charge is charge “to the patient group accounting for the largest number of non-Medicaid prescriptions”) and Idaho Admin. Code, IDAPA, 16.03.09.665(2)( C ) (U&C charge is “lowest price by the provider to the general public.”)
44See, e.g., 130 Code of Mass. Reg. 406.411(1) and (4); 55 Pa. Code § 1121.53(c) (2010); CRIR 15-040-004 § VII(C)(2).