CMS has just corrected an error in a 2016 rulemaking that inadvertently called for a 10-fold increase in certain “Sunshine Act” civil monetary penalties (CMPs).

Under section 1128G of the Social Security Act, applicable manufacturers must report annually to CMS any payments or other transfers of value to covered recipients. In addition, the statute requires applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership investment interests held by physicians or their family members in such entities.  If an entity fails to report the required information in a timely manner, the statute authorizes a CMP amount between $1,000 and $10,000 for each payment or transfer of value or ownership or investment interest not reported, up to an annual cap of $150,000 per submission.

A September 6, 2016 interim final rule adjusting certain CMP amounts for inflation inadvertently changed the base penalty range from $1,000 and $10,000 to $10,000 and $100,000, respectively, for these Sunshine Act violations.  CMS is now correcting this error “to ensure that the regulations accurately reflect the statutory authority.”