The civil monetary penalties for violations of myriad health
care laws continue to rise. In June, we
discussed the enormous increase in penalties under the federal
False Claims Act ("FCA"). Through an
interim final rule, the Department of Justice nearly doubled
the per-claim FCA penalty. The minimum per-claim FCA penalty
increased from $5,500 to $10,781 and the maximum
per-claim FCA penalty increased from $11,000 to
$21,563. The FCA penalties nearly doubled because the
Federal Civil Penalties Inflation Adjustment Act of 2015 (the
"2015 Adjustment Act") required federal agencies to
update civil monetary penalties ("CMPs") within their
jurisdiction by August 1, 2016 to catch-up with inflation.
Because of the 2015 Adjustment Act, numerous other CMPs—in
addition to the FCA—recently have increased or likely will
First, as my colleague
predicted, the Office of Inspector General ("OIG") recently announced that it will review state
false claims acts to verify that the state's per-claim
penalties utilize the increased federal FCA penalties. Under the
Deficit Reduction Act of 2005, states a receive 10% increase in FCA
recoveries if OIG determines that the state's FCA, among other
things, (1) is "at least as effective" as the federal
FCA, and (2) contains a civil penalty amount at least the same as
the federal FCA's civil penalty. States have a two-year grace
period to amend their state FCAs. Whether states are willing to
double the amount of state FCA penalties remains to be seen.
Second, the Department of Health and Human Services
("HHS") issued an interim final rule increasing the CMPs applied
by all HHS agencies. The breadth of the amended penalties is
staggering. The interim final rule includes a table entitled
"Calculation of CMP Adjustments," listing the affected
provisions, the percentage penalty increase, and the new maximum
penalty. The table spans 21 pages of the Federal Register, listing
nearly 300 amended penalties.
Health care providers and suppliers should refer to HHS's
"Calculation of CMP Adjustments" table for the complete
list of CMP increases. But to select a few examples, HHS will
increase the CMPs for:
A health care provider who violates
the Stark Law's prohibition on physician self-referrals;
A clinical laboratory that fails to
meet Medicare participation and certification requirements;
A skilled nursing facility that fails
to comply with Medicare certification requirements;
A health care provider that employs
or contracts with an individual who has been excluded from
participation in federal health care programs; and
A pharmaceutical or medical device
manufacturer that does not meet the Sunshine Act's reporting
HHS's CMP increases apply to civil penalties assessed after
August 1, 2016, whose associated violations occurred after November
The breadth of increased CMPs for violations of the enormously
complex regulatory landscape in which health care providers operate
ups the ante for robust compliance programs. When health care
providers face allegations that they violated one of myriad health
care laws, the increased penalties likely will factor into their
calculation about whether to challenge or resolve the allegations
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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