On June 30, the Department of Justice passed an interim final rule that gave False Claims Act penalties a big raise. Here's what you need to know:
- The False Claims Act prohibits submitting false or fraudulent claims to the Federal government (e.g. Medicare or Medicaid) for payment
- Health care providers who submit false claims face penalties.
- The current False Claims Act penalties are: $5,500 (minimum) and $11,000 (maximum) per claim.
- Starting August 1, 2016, these penalties increase to $10,781.40 (minimum) and $21,562.80 (maximum).
- The new amounts apply to false claims submitted after November 2, 2015.
- Because the penalty amounts are "per claim," providers facing lawsuits or investigations involving multiple claims need to multiple these penalty amounts by the number of claims involved to estimate their exposure.
When False Claims Act penalties double, so do whistleblower rewards. This means that employees, former employers and competitors have twice the motivation to report providers' claims inaccuracies to the government.
When False Claims Act penalties double, so does the importance of your compliance program. The best way to avoid the financial exposure of a False Claims Act lawsuit or settlement is to put ample resources into your compliance program effort:
- PREVENT non-compliance with policies, procedures, and employee education
- DETECT non-compliance with an anonymous way to report non-compliance internally, and routine audits
- CORRECT non-compliance before it grows into a bigger problem
- SELF-REPORT non-compliance to receive mitigated penalties