- The Justice Department doubled the amount healthcare providers and others must pay for violating the False Claims Act.
- Under the interim final rule, published in Thursday’s Federal Register, minimum penalties for a fraudulent claim will rise from $5,500 to $10,781, while maximum penalties per claim will top out at $21,563 — up from the current $11,000.
- The hefty increases were triggered by the Bipartisan Budget Act of 2015, which requires government agencies to adjust penalties for inflation over the past 30 years.
Under the rule, future adjustments will be based on the difference in the Consumer Price Index between the October preceding the adjustment and the previous October. In addition, civil penalty amounts will be rounded to the nearest $1, rather than to larger “rounders” used in the past.
The penalties hike could raise constitutional concerns regarding due rights and protection from excessive fines, McDermott Will & Emery partner Amandeep Sidhu writes in the National Law Review. “With FCA cases increasingly involving tens of thousands of claims, the application of these increased penalties could easily result in circumstances where punitive recoveries are dramatically out of proportion with single damages,” he says.
Last month, the Justice Department announced an unprecedented sweep of 36 federal districts, charging 301 healthcare professionals for false billings totaling about $900 million.
To avoid having to pay steep penalties on top of damages, providers and others often settle false claims cases with the government. Last October, for example, Tuomey Healthcare System agreed to pay $72.4 million for illegal compensation arrangements with doctors, circumventing a $237 million verdict, as previously reported in Healthcare Dive.
The interim rule takes effect Aug. 1 and will apply to claims filed after Nov. 2, 2015. Public comments may be submitted through Aug. 29.