Feds double FCA and kickback penalties

Gavel and stethoscope

Healthcare providers that violate federal fraud regulations will pay twice as much in penalties, according to a proposed rule from by the Department of Justice. It's an increase that many in the industry have anticipated since last year.

Civil monetary penalties for False Claims Act (FCA) violations will increase from a minimum fine of $5,500 to $10,781 per claim. Maximum FCA penalties and Anti-Kickback Statute violations will increase from $11,000 to $21,563 per claim.

The new penalties will take effect on Aug. 1 and will only apply to violations that occurred after Nov. 2, 2015. The 60-day comment period on the proposed rule ends Aug. 29.

Legal experts predicted the DOJ’s increase after the Railroad Retirement Board doubled its penalties for FCA violations in May. The DOJ was required to review its civil monetary penalties in accordance with the Bipartisan Budget Act of 2015, which stipulated the initial penalty increase could not exceed 150 percent. The DOJ had not adjusted the penalties since 1986. 

Although FCA recoveries dropped 40 percent overall last year, the healthcare industry still accounted for more than half of all FCA settlements and judgements. Over the last year, the government has seen an uptick in civil actions thanks to a 10-person litigation team announced by the Department of Health and Human Services Office of Inspector General introduced last year.

- here’s the DOJ’s proposed rule