Blame it on Inflation: Civil Monetary Penalties Increase

The U.S. Department of Health and Human Services (HHS) has published an interim final rule that adjusts for inflation the maximum civil monetary penalties (CMP) that HHS agencies are authorized to assess or enforce.

The changes became effective Sept. 6, and are applicable only to civil penalties assessed after Aug. 1, 2016, whose associated violations occurred after Nov. 2, 2015. Before 2015, civil monetary penalties authorized under the Social Security Act were exempt from inflation adjustments under the law. However, on Nov. 2, 2015, President Barak Obama signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 which amended the Federal Civil Penalties Inflation Adjustment Act of 1990.

The rule implements a mandated “catch up†adjustment to the CMP levels, which will be updated annually for inflation going forward.

Under the interim final rule, some civil monetary penalties will nearly double as a result of having to adjust to inflation.

Below are some examples:

• The penalty for a hospital or responsible physician dumping patients needing emergency care, if the hospital has less than 100 beds, jumps from $25,000 to $51,570.

• The penalty for circumventing Stark Law’s restrictions on physician self-referrals increases to $159,089 from $100,000.

• The penalty for a Medicare Advantage organization that engages in a practice that would reasonably be expected to have the effect of denying or discouraging enrollment increases from $100,000 to $147,177.

Other penalties that are not as great, but are still seeing a significant increase include:

• Penalty for physicians who knowingly receive payments from a hospital or critical access hospital to induce such physician to reduce or limit services to individuals under direct care of physician, or who are entitled to certain medical assistance benefits would increase to $4,313 from $2,000.

• The penalty for improper billing by hospitals, critical access hospitals, or skilled nursing facilities more than doubles to $5,000 from $2,000.

• The penalty for any durable medical equipment supplier that knowingly and willfully charges for a covered service that is furnished on a rental basis after the rental payments may no longer be made increases to $15,024 from $10,000

Click here to read a full list of adjustments.

If you have any questions or concerns, feel free to contact The Health Law Offices of Anthony C. Vitale at 305-358-4500 or email us at info@vitalehealthlaw.com.