Department of Justice Ups Ante: Per Claim Penalties for False Claims Act & Anti-Kickback Statute Violations Nearly Double on August 1

On June 30, 2016, the Department of Justice (“DOJ”) published an interim final rule that dramatically increases the per claim penalties for violations of the False Claims Act (“FCA”) and the Anti-Kickback Statute (“AKS”) among other laws.

While previously the minimum FCA penalty per claim was $5,500, it will now be $10,781 per claim. The maximum FCA penalty per claim rises from $11,000 to $21,563 per claim. Further, the penalty for violating the AKS increases from $11,000 per claim to $21,563 per claim. The DOJ has clarified that these new penalties apply only when levied as part of an assessment made after August 1, 2016, for a violation occurring after November 2, 2015.

When the Violation and Assessment Occurred Anti-Kickback Statute Penalty Per Claim False Claims Act Penalty Per Claim
Violations that occurred on or before November 2, 2015

Assessment made on or before August 1, 2016, whose associated violations occurred after November 2, 2015

 $11,000 Minimum Penalty: $5,500

Maximum Penalty: $11,000
Assessments made after August 1, 2016, whose associated violations occurred after November 2, 2015 $21,563

Minimum Penalty: $10,781

Maximum Penalty: $21,563

This increase in penalties was authorized as part of the Bipartisan Budget Act of 2015. Penalties under the FCA and AKS are civil monetary penalties, which the federal government is required by law to periodically evaluate and adjust for inflation to ensure that the penalties continue to maintain their deterrent effect. The increases announced in the June 30th rule reflect the increase in the cost of living between when the law giving rise to each penalty was enacted and 2015, when the increases were authorized. These adjustments, however, were capped at 250%.

These per claim penalty increases may have a profound impact on healthcare providers as a FCA and/or AKS case against a healthcare provider may involve hundreds or thousands of claims made to the Centers for Medicare and Medicaid.

Potential Advocacy Opportunities:

  • Connect with local and national professional and industry groups to understand how these groups plan to respond to the new per claim penalties
  • Draft a response to DOJ’s interim final rule and submit it before August 29, 2016

 

Sherman & Howard L.L.C. has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation and does not create an attorney-client relationship between any reader and the Firm.

©2016 Sherman & Howard L.L.C.                                                                                       August 18, 2016