Dive Brief:
- The Bipartisan Budget Act of 2015, signed into law Nov. 2, increases civil monetary penalties to account for inflation by August 2016. This means some increases will be substantial since some penalties haven't changed since 1987.
- Some of the penalty increases could include higher daily penalties for nursing homes non-compliant with Medicare and Medicaid conditions of participation (up to a 50% increase to $20,000/day), and higher penalties for providers accused of fraud, which could increase as much as 40% (currently $5,500 to $11,000 per false claim).
- Reactions to the higher fines have been mixed with legal experts stating it's no reason for providers to panic while the American Health Care Association Senior Director of Regulatory Services Lyn Bentley, told Modern Healthcare, the fines could be "devastating" for large nursing homes with many Medicaid patients.
Dive Insight:
HHS Secretary, Sylvia Burwell, has the power to issue a rule keeping the penalties below the new maximum if the social costs outweigh the benefits or the higher penalties would have a "negative economic impact," as per the new law.
Some legal experts say the new law may have minimal effect. Jennifer Weaver, a partner at Waller Lansden Dortch and Davis, told Modern Healthcare the government may want to scale back the penalties because they could be a violation of the Eighth Amendment, which bars excessive fines. In addition, she said False Claims Act cases usually settle for amounts that reflect the government's losses rather than the penalties.
There have been a number of settled big False Claims Act cases over the past several months, including Adventists Health System's $118.7 million settlement and Tuomey Healthcare System's $72.4 million settlement, which circumvented a $237 million verdict, as previously reported in Healthcare Dive.