Over the past few years, third-party payers, such as large employer-based benefit plans, health maintenance organizations and traditional insurers, have increasingly found a new profit source--recoveries from prescription-drug overcharge
For many years, there were no federal regulations governing the processing of overcharge
Even when overcharges
have been pointed out, reclaiming the money can be a long, drawn out process, he said.
This comes four years after the disclosure of widespread overcharges
by thrifts holding such mortgages.
The regulations on the price and supply of petroleum products that spawned the overcharge
cases originated with Richard Nixon's temporary wage and price controls.
Pursuant to a 1997 enactment, the New York State Legislature amended the Rent Stabilization Law to provide that "no determination of an overcharge
and no award or calculation of an award of the amount of an overcharge
" could be based upon an overcharge
having occurred more than four years before the complaint is filed.
There were virtually no trials until the Court of Appeals forced the city to refund approximately $40 million to the owners of One New York Plaza, of which $28 million was overcharges
and the rest interest going back to the FY '84 assessment roll.
Whether the complaint was overcharge
, fair market rent appeal, harassment or decreased services, we found time and again that a well-documented and thoroughly researched presentation would be well-received by DHCR.
First, the Rent Stabilization Code provides that an owner acquiring a property via a judicial sale (where records are unavailable to permit the purchaser to determine the legal rents) shall not be liable for making refunds on the seller's overcharges
. As a result, there is a significant benefit to a purchaser at a judicial sale resulting from foreclosure or bankruptcy.
Since this rent was never actually charged, he warned, "If you spend $50,000 to get the 1/40, be aware of the pitfalls." The owner might get hit with an overcharge
and be assessed treble damages.
Many other suburban unit owners had been charging rents that just covered their mortgage and maintenance payments and were later hit with overcharges
under the ETPA rules.
Laub was deemed guilty of willful overcharges
of rent and the tenant was awarded treble damages.