First Ever Federal and 17 State Whistleblower Settlement Under Affordable Care Act Over Failure to Return Overpayments Within 60 Days

The U.S. Attorney’s Office announced that Pediatric Services of America Healthcare, Pediatric Services of America, Inc., Pediatric Healthcare, Inc., Pediatric Home Nursing Services (collectively, “PSA”), and Portfolio Logic, LLC agreed to pay $6.88 million ($6,882,387) to resolve allegations that PSA, a provider of home nursing services to medically fragile children, knowingly (1) failed to disclose and return overpayments that it received from federal health care programs such as Medicare and Medicaid, (2) submitted claims under the Georgia Pediatric Program for home nursing care without documenting the requisite monthly supervisory visits by a registered nurse, and (3) submitted claims to federal health care programs that overstated the length of time their staff had provided services, which resulted in PSA being overpaid.

This is the first settlement under the False Claims Act involving a health care provider’s failure to investigate credit balances on its books to determine whether they resulted from overpayments made by a federal health care program. Under section 6402 of the Affordable Care Act, health care providers must report and return any overpayments by the later of (i) 60 days after the overpayment was identified or (ii) the date any corresponding cost report is due (if applicable).

PSA had been maintaining numerous credit balances on its books that related to claims it had submitted to various federal health care programs, some of which had been on PSA’s books for several years. Additionally PSA wrote off and absorbed credit balances that had resulted from overpayments into their revenue because they had not investigated the reason for the credit balances before doing so. At the government’s request, PSA cooperated with a joint audit of the credit balances on its books in order to identify all outstanding overpayments.

As part of the settlement, PSA has agreed to enter into a corporate integrity agreement with the U.S. Department of Health & Human Services, Office of Inspector General (HHS-OIG), which will require PSA to put in place procedures and reviews to avoid and promptly detect conduct similar to that which gave rise to the settlement.

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