Just 100 Claims Could Cost Practices More Than $2 Million!
On June 29, 2016, the U.S. Department of Justice announced that penalties under the False Claims Act (FCA) will nearly double.
Specifically, as a result of an interim final rule entitled “Civil Monetary Penalty Inflation Adjustment,” the Railroad Retirement Board (Board) is allowed to make adjustments to the minimum and maximum amounts of civil monetary penalties under the Board’s jurisdiction. False Claims Act penalties fall under the Board’s purview.
The interim final rule, published on May 2, 2016, and going into effect on August 1, 2016, will increase the minimum penalties for FCA violations from $5,500 to $10,781 and the maximum penalties from $11,000 to $21,563 per claim.
The Danger for Healthcare Providers
The penalty increase is the result of Board adjusting the penalty amounts for inflation since the last Board adjustment. The last time the Board adjusted the civil penalties under its jurisdiction was October 1996, or almost 20 years ago.
So, if a court found ONLY 100 claims that qualified as a false claim, a provider could be subject to over $2 million in penalties.
Imagine: one hundred claims could cause your practice over two million dollars in penalties.
And If That’s Not Enough, There’s More Bad News
Additionally, a June 21st, U.S. Supreme Court decision ruled that the government impose FCA penalties based on the legal theory of implied certification.
In other words, when a provider submits a claim for reimbursement, the provider impliedly certifies that the claims complies with any applicable laws or regulations.
For example, the Affordable Care Act requires providers who participate in federal health plans to have a compliance program. Also, many states, such as Texas, require providers to attest they have a compliance program as part of the re-certification process.
Under this example, if a provider certifies that a compliance program is in place but doesn’t have one, then all claims paid under a federal program could qualify as a false claim.
So, in addition to usual suspects considered false claims, such overbilling, billing for services not provided, billing under the wrong provider number or unbundling, submitting misleading information or failing to comply with a contractual or regulatory requirement could trigger FCA penalties. Also, don’t forget that claims that trigger the Anti-Kickback Statute’s penalties are considered false claims as well.
Protect Yourself With A Compliance Plan
Having a compliance program is a no-brainer. Regulators see active compliance programs as mitigating factors when violations are identified.
Research shows that fines and penalties are reduced up to 90 percent when practices have a compliance program in place. In one study, 94% of state attorneys’ general were more lenient to companies with effective compliance programs. Federal judges must credit companies for effective compliance programs when determining sentences.
However, a compliance program must be more than a binder on the shelf or “paper program”, it must be a living, breathing ever-changing program that is engrained into the practice’s culture.
In short, prepare your practice on the latest regulatory changes and court decisions by having robust compliance tools and training. It could save you a great deal of time and money.