U.S. District Court Issued Healthfirst Decision on the 60-Day Rule.

Date posted: September 3, 2015

The United States District Court for the Southern District of New York recently published a decision interpreting, for the first time, the Affordable Care Act’s (ACA) 60-day repayment rule in Kane v. Healthfirst.  The ACA 60-day repayment rule requires providers to report and repay Medicare and Medicaid overpayments within 60 days of the date on which the overpayment is “identified.”  An overpayment knowingly retained after 60 days becomes an obligation with reverse false claims act liability, whereby the government can pursue civil penalties amounting to treble the amount withheld plus up to $11,000 per claim.

In 2012, the Centers for Medicare & Medicaid Services issued a proposed rule stating that a provider has “identified” an overpayment when it has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment.  The Healthfirst decision interpreted and further clarified the meaning of the word “identified.”  The court stated identification occurs when a provider is put on notice of a potential overpayment rather than at the time an overpayment is conclusively ascertained.  However, the court also noted that well-intentioned providers that work “with reasonable haste” to address identified overpayments should be safeguarded under prosecutorial discretion to provide consistency with the spirit of the law.

The U.S. District Court decision in Kane v. Healthfirst is available at:


United States ex rel. Kane v. Healthfirst et al., No. 1:11-cv-02325-ER, Doc. No. 63 (S.D.N.Y. Aug. 3, 2015).

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