New Civil Penalties for False Claims

New Civil Penalties for False Claims

Recently congress incorporated into its budget healthcare related fines that are significantly higher than in the past. These fines are for submitting fraudulent claims for Medicare or Medicaid services or products. To soften the blow, legal advisors say that if a provider is not planning on committing fraud then they should not be bothered by these “outrageous” increases in these fines.

First targeted for these increased fines are nursing homes. The part of the new fine schedule that is most concerning however is the issue of a nursing home being non-compliant with CMS conditions of participation, with this penalty going from $10,000 to $20,000 per DAY.  One can clearly see that if a facility is working on making changes, adjustments and improvements to become compliant following an inspection, this “devastating” daily fine can surely wipe out the facility.

The increase in these monetary penalties is scheduled to begin in August of 2016 and have just been signed into law on November 2, 2015. Considering that some of these fines have not changed sine the late 1980’s and are being adjusted for “inflation” it is understandable how such large increases have been the result.

The director of HHS does have the authority to keep the penalties lower than the maximum as shown above if it is found “that the social costs outweigh the benefits or the higher penalties would have a negative economic impact.” Nursing homes are currently looking for solutions and options.

Another penalty to be increased is for violation of the False Claims Act, which is a criminal offense for the fraudulent submission of claims to governmental programs. These will increase from the 1999 amount of $5,500 per false claim to $11,000 per false claim. Additionally the government is allowed to collect three times the amount of money that is lost as a result of these fraudulent submissions.

After all is considered, these outrageous fines will motivate violators to settle their cases rather than risk the full force of the legal options available to CMS. Some are questioning the constitutionality of these increases as a violation of the 8^th Amendment’s “cruel and unusual punishment” clause.