On August 3, 2015, the United States District Court in the Southern District of New York issued a long-awaited opinion and order rejecting a motion to dismiss filed by the defendants in U.S. ex rel. Kane v. Continuum Health Partners, Inc., et al. (alternately known as Kane v. Healthfirst, Inc., et al.). The case, which we previously covered here, here, and here, is the first publicly unsealed whistleblower case interpreting the Patient Protection and Affordable Care Act’s (PPACA) so-called “60-Day Rule.” The 60-Day Rule subjects health care providers to potential liability under the federal False Claims Act (FCA) for failing to report and return an overpayment of Medicare or Medicaid funds within 60 days of the date on which such overpayments are “identified.”

The central issue in the case, the subject of the defendants’ motion to dismiss and the Court’s opinion and order, concerns the definition of “identify” for purposes of the 60-Day Rule, as that term is not defined by the PPACA. The Court stated that “the term ‘identified’ has no ‘plain meaning’ as it is used in the [PP]ACA” and looked to the statutory scheme as a whole to determine the meaning of that term within the context of the 60-Day Rule. After considering the legislative history and purpose of the 60-Day Rule, the Court sided with the Department of Justice and held that an overpayment is “identified” when a provider is put on notice of a potential overpayment rather than the moment when an overpayment is conclusively ascertained. The Court stated that the legislative history indicates that Congress intended for FCA liability to attach with an established duty to repay the government, even if the exact amount due is not yet determined.