Spending Bill Increases Penalties for Healthcare Fraud, Waste, and Abuse

On February 9, 2018, President Trump signed into law the Bipartisan Budget Act of 2018. While this law received a lot of attention for avoiding a lengthy government shutdown and extending the Children’s Health Insurance Program (CHIP), the law also affects healthcare providers by drastically increasing potential penalties for acts of fraud, waste, and abuse related to federal healthcare programs.

The Civil Monetary Penalties Law (CMPL), codified at 42 U.S.C. § 1320a-7a, imposes civil monetary penalties and assessments for various types of conduct, including, among other things, filing certain improper claims, accepting or paying kickbacks, offering beneficiary inducements, and arranging or contracting with excluded persons. Under the 2018 Budget Act, the penalties available to the government under the CMPL have now more than doubled. For example, while the CMPL provides that violating the Anti-Kickback Statute (AKS) can lead to a penalty of $50,000 per violation, the Budget Act increases that penalty to $100,000 per violation. Conduct that used to be punishable by up to $10,000 per violation under the CMPL is now punishable by CMPs of up to $20,000 per violation. (Note that the original penalties were already higher than listed in the CMPL due to relatively recent upward adjustments for inflation.)

The 2018 Budget Act also amends the AKS, codified at 42 U.S.C. § 1320a-7b(b), which makes it a felony to knowingly and willfully solicit, receive, offer, or pay remuneration in exchange for federal healthcare program referrals. Specifically, the Budget Act increases the maximum penalty under the AKS from $25,000 to $100,000 per violation, and increases the maximum term of imprisonment from five to ten years. It is important to note that the increased penalties under the 2018 Budget Act are applicable only to violations committed after the date of enactment, February 9, 2018.

These provisions of the 2018 Budget Act demonstrate the federal government’s continued commitment to aggressively pursue alleged fraud, waste, and abuse affecting federal healthcare programs.

The attorneys at Chilivis Grubman represent healthcare providers of all types and sizes in connection with government investigations, False Claims Act litigation, and a wide variety of regulatory and compliance matters, including those involving the Stark Law, Anti-Kickback Statute, and False Claims Act. For any questions, or if we can assist you in connection with such a matter, please contact us at (404) 262-6505 or sgrubman@cglawfirm.com.