By Ben Regalado, MBA, Contributing Writer, SCG Health
Twitter: @SCGhealth
Payment rates, also known as “reimbursement” (an outdated term if there ever was one), may not be keeping up with the increase in cost of living, but the federal government isn’t so much worried about your revenue as its own. Okay, maybe that’s the cynical view behind the upcoming increase in fines for violation of various laws and regulations familiar to healthcare professionals. But perhaps they also are making up for lost time while increasing the size of their stick.
Whether you look through a cynical eye or not, your focus should be on this: As outlined in the interim rule published August 1, the fines for violations of the False Claim Act, Anti-Kickback Statutes, and Self-Referral Statutes will more than double, making up for 30 years of lost time.
Implementation of the Bipartisan Budget Act of 2015 required government agencies to adjust penalties, in some cases dramatically, effective with violations occurring after November 1, 2015 (yes – 2015). As a result, the minimum penalty for a fraudulent claim (singular!) goes from $5,500 to $10,781 with the maximum about rising from $11,000 to $21,563. The $21,563 mark is also the penalty for violations of the Anti-Kickback Statutes.
According to Modern Healthcare, some healthcare attorneys aren’t as concerned about the impact due to the already high penalty amounts and potential constitutional questions (as the 8th Amendment prohibits excessive fines). In fact, many claims are settled with a focus on the government’s actual losses. But with about two-thirds of all False Claim Act whistleblower claims in 2015 coming from health care, the motivation to do so will not abate. As the chairman of the American Bar Association’s health law section said, “The potential pot at the end of the rainbow gotten bigger.”
What are some of the laws impacted?
The False Claims Act makes it illegal to “knowingly presenting a false or fraudulent claim to the government for payment, and making a false record or statement that is material to the false or fraudulent claim.” If found guilty, the government is entitled to recover three times the amount of the false claim in addition to the penalty. Given what Medicare pays for services, the penalty is the most substantial stick, along with exclusion from the program. (Exclusion is, of course, is part and parcel of many penalties for violation of laws surrounding government health programs.)
A false claim isn’t merely claiming for a service that isn’t provided, but includes services provided that are covered under another claim, are improperly coded, or are not supported by medical record documentation.
The Anti-Kickback Statute, “prohibits the knowing and willful offer, payment, solicitation, or receipt of any remuneration, in cash or in kind, to induce or in return for referring an individual for the furnishing or arranging of any item or service for which payment may be made under a Federal health care program.” Of course, as a criminal law, violations can come with substantial criminal financial and imprisonment penalties as well.
The Physician Self-Referral Statute, commonly called the “Stark” Laws, prohibit referring Medicare or Medicaid patients to certain designated health services with which the referring party has a direct or indirect financial relationship (with certain exceptions). Originally focused on clinical laboratory services, this has expanded to include a wide range of healthcare services and supplies.
The increase in fines isn’t just limited to the laws noted. Fines associated with violations of statutes from the Americans with Disabilities Act also have doubled, for example.
The increase in potential penalties and recovery across the landscape will likely bring more scrutiny. So keep your eyes open.
What you need to do
As part of a strong compliance plan, continue to train your staff on various laws and penalties that could impact the practice.
For further background on the change in civil monetary penalties across the federal government landscape, see the Federal Register.
This article was originally published on the SCGHealth Blog and is republished here with permission.