Reverse False Claim
A reverse false claim is a violation of the civil False Claims Act that consists not of wrongly obtaining money from the government, but of wrongly keeping money owed to it. Under 31 U.S.C. § 3729(a)(1)(G), a person is liable who “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money” to the government. The Act defines an “obligation” to include “the retention of any overpayment,” which is what links the reverse false claim to the 60-day overpayment rule: an identified Medicare or Medicaid overpayment kept past the deadline to return it becomes an obligation whose avoidance is a reverse false claim.
Updated
A reverse false claim is one of the two basic ways to violate the civil False Claims Act. The ordinary false claim is about money flowing out of the government wrongly — a claim for payment that is false or fraudulent. A reverse false claim is the mirror image: money that should flow back to the government but does not. The statute, at 31 U.S.C. § 3729(a)(1)(G), imposes liability on a person who “knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.”
The link to health care billing runs through the word “obligation.” The False Claims Act defines an obligation to include “the retention of any overpayment,” and “knowing” carries the Act's usual meaning — actual knowledge, deliberate ignorance of the truth, or reckless disregard of the truth, with no proof of specific intent to defraud required.
In practice
The most common way a billing operation meets a reverse false claim is through the 60-day overpayment rule. The Affordable Care Act (42 U.S.C. § 1320a-7k(d)) requires a provider to report and return an identified Medicare or Medicaid overpayment by a deadline, and it states that an overpayment retained past that deadline is an obligation for False Claims Act purposes. Keeping an identified overpayment too long therefore does not stay a billing error — it can become a reverse false claim.
That is why an unreviewed credit balance is a compliance concern and not only an accounting one. Once an overpayment has been identified, the money is the government's; avoiding its return is the conduct the reverse-false-claim provision reaches, and liability can be pursued by the government or by a whistleblower.
Commonly confused with
- Overpayment: An overpayment is the money itself — funds a person received under Medicare or Medicaid to which, after applicable reconciliation, it was not entitled. A reverse false claim is the False Claims Act violation that can arise from knowingly failing to return an identified overpayment by the deadline. The overpayment is the object; the reverse false claim is the wrong.
- False Claims Act: The False Claims Act is the federal statute. A reverse false claim is one theory of liability under it — knowingly avoiding an obligation to pay money owed to the government — as opposed to the ordinary theory of knowingly presenting a false or fraudulent claim for payment.