The Office of Inspector General (OIG) has increased the value of permissible gifts that may be made to Medicare beneficiaries without running afoul of the civil monetary penalty (CMP) provision prohibiting beneficiary inducements (Social Security Act § 1128A(a)(5)).  The statute provides for CMPs of up to $10,000 for offers or transfers to a Medicare or

The Department of Health and Human Services (HHS) is increasing maximum civil monetary penalty (CMP) amounts applicable to HHS agencies and programs, in compliance with the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (which was part of the Bipartisan Budget Act of 2015).  The magnitude of the individual CMP increases varies depending on when the specific type of penalty was last adjusted and consequently how large a “catch-up” adjustment is applied.  Increases range from 1% to 150%.  For instance:
Continue Reading HHS Inflation Adjustment Rule Hikes CMPs Across Department Programs

Today the Department of Justice published an interim final rule with request for comments that applies an inflation adjustment to civil monetary penalty (CMP) amounts assessed by the Department, as mandated by the Bipartisan Budget Act of 2015.  Notably, the new maximum CMP for False Claims Act (FCA) violations under 31 U.S.C. 3729(a) is

The OIG has issued its Spring 2016 Semiannual Report to Congress, which describes significant enforcement and investigative activities relating to HHS programs during the first half of FY 2016 (October 1, 2015 – March 31, 2016). The OIG reports expected recoveries of more than $2.77 billion ($554.7 million in audit receivables and about $2.22

On April 19, 2016, the Health Resources and Services Administration (HRSA) is publishing a notice reopening for 30 days the comment period on its June 17, 2015 proposed rule entitled “340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Regulation.”  While comments may be submitted on any aspect of the proposed

On November 2, 2015, President Obama signed into law H.R. 1314, the “Bipartisan Budget Act of 2015” (BBA).  The two-year, $80 billion budget/debt-ceiling deal is funded in part by several significant Medicare and Medicaid policies, including an extension of Medicare sequestration, changes to Medicare payment for services provided in “new” off-campus hospital outpatient departments (OPDs), and extension of inflation-based Medicaid drug rebates to generic drugs.
Continue Reading Bipartisan Budget Law Extends Medicare Sequestration, Includes Medicaid Drug Rebate, Off-Campus Hospital Outpatient Department, CMP Inflation Policies

The Bipartisan Budget Act of 2015 (H.R. 1314), signed into law by President Obama November 2, 2015, will increase the civil monetary penalties (CMPs) imposed under the Social Security Act (SSA) in addition to False Claims Act (FCA) penalties (among other civil penalties).  Under an innocuous-sounding provision, entitled “Civil monetary penalty inflation adjustments,” the budget deal removed an inflation update exclusion that previously applied to the SSA as well as the Occupational Safety and Health Act (OSHA).  The budget deal also requires that federal agencies implement a “catch up” penalty update through interim rulemaking no later than August 1, 2016, along with annual penalty updates thereafter. Pursuant to the provision requiring penalty “catch up” adjustments, agencies must update penalties to reflect Consumer Price Index (CPI) updates for each CMP from October of the calendar year during which the amount of such CMP was established or last adjusted under a provision of law other than the Federal Civil Penalties Inflation Adjustment Act of 1990.  However, such “catch up” adjustment are capped at 150% of the current penalty amount.  For example, a penalty now set at $10,000 may not increase to more than $25,000.  Under this “catch up” methodology, per day CMPs imposed on nursing facilities under the SSA, currently capped at $10,000, will likely increase to approximately $20,000 no later than August 1, 2016.  The nursing facility CMP update to approximately $20,000 would reflect the inflation updates since the establishment of these CMPs in 1987.  After the initial, “catch up” update, annual adjustments will be made consistent with CPI cost-of-living updates.
Continue Reading Bipartisan Budget Act Jacks Up Civil Monetary Penalties Under the Social Security Act and False Claims Act Penalties

The Centers for Medicare & Medicaid Services (CMS) and the Office of Inspector General (OIG) have finalized a rule designed to “remove legal and regulatory barriers that can impede care coordination in furtherance of the Shared Savings Program” and “reduce burden on ACOs, ACO participants, and ACO providers/suppliers.”  Specifically, the rule allows ACOs, ACO participants, and ACO providers/suppliers to seek to comply with one or more specified waivers so that they have assurance that participating in certain arrangements would not subject them to liability under the physician self-referral law (Stark Law), federal anti-kickback statute, or the beneficiary inducements civil monetary penalties (CMP) law provision.  According to CMS, the waivers “are critical to providing stakeholders with flexibility necessary for innovative care redesign.”
Continue Reading CMS/OIG Finalize Fraud Authority Waivers for Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program (MSSP)

Outgoing House Speaker John Boehner and the Obama Administration have reached agreement on a two-year, $80 billion budget/debt-ceiling deal that includes Medicare and Medicaid “offsets” to finance other spending. For instance, while the budget would provide $80 billion in discretionary spending sequestration relief over two years, it would extend Medicare sequestration for an additional year, through 2025. The deal also would:
Continue Reading Pending Budget Deal Includes Medicare Sequestration Extension, Other Medicare/Medicaid Cuts

On June 17, 2015, the Health Resources and Services Administration (HRSA) issued a proposed rule to implement civil money penalty (CMP) provisions added to section 340B of the Public Health Service Act as part of the Affordable Care Act (ACA). The proposed rule addresses three primary issues: (i) the calculation of the 340B “ceiling price&rdquo

The Health Resources and Services Administration (HRSA) is seeking White House review of its proposed rule to implement new Affordable Care Act 340B drug discount program enforcement authorities and pricing policies. More than four years after soliciting comments on the planned rulemaking, the HRSA proposal will address its authority to impose civil monetary penalties (CMPs)

The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has published a major proposed rule that would amend the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty rules to protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the AKS. Reed Smith has prepared a Client Alert analyzing the proposed rule, highlighting areas where the OIG is seeking public comment. Overall, the OIG appears to recognize that new health care delivery mechanisms demand a more flexible approach to fraud and abuse enforcement than has been the case in the past, as discussed in our analysis.
Continue Reading Reed Smith Client Alert: Analysis of HHS OIG Proposed Rule to Amend the Anti-Kickback Safe Harbors, CMP Rules on Beneficiary Inducements & Gainsharing Regulations

Today the OIG and CMS published a joint notice continuing the effectiveness of fraud and abuse law waivers granted in 2011 in connection with the Medicare Shared Savings Program, which is intended to encourage physicians, hospitals, and certain other types of providers and suppliers to form accountable care organizations (ACOs). 

By way of background,

The OIG has just released a major proposed rule to amend the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty (CMP) rule to protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the anti-kickback statute.  In particular, with regard to the AKS, the OIG proposes:

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The Office of Management and Budget (OMB) has cleared an HHS Office of Inspector General (OIG) proposed rule that would expand the OIG’s Medicare and state health care program fraud and abuse authorities. Specifically, on September 4, 2014, the OMB gave final regulatory clearance to an OIG proposed rule that would add new anti-kickback safe

The OIG has issued its spring Semiannual Report to Congress, which summarizes major OIG activities during the period of October 2013 through March 2014. The OIG highlights “ramped up” oversight of Affordable Care Act implementation efforts, particularly with regard to eligibility systems, payment accuracy, contractor oversight, and data security associated with the Health Insurance

On the heels of its proposed rule to expand its health program exclusion authority, the Office of Inspector General (OIG) of the Department of Health and Human Services has published a proposed rule that would amend the health care program civil monetary penalty (CMP) regulations. The rule would codify the OIG’s expanded statutory authority under the Affordable Care Act to impose CMPs on providers and suppliers and would allow for significant penalties in a variety of scenarios, some of which could extend beyond what is currently permitted.

Reed Smith attorneys have prepared a Client Alert summarizing and analyzing the OIG’s proposed rule, including the various scenarios under which CMPs could be issued under the proposed regulations, such as: failure to report and return an overpayment; failure to grant OIG timely access to records upon request; ordering or prescribing items or services while excluded from a federal health care program, as well as arranging or contracting with an individual or entity who meets this criteria; making false statements or omitting or misrepresenting material facts in an application, bid, or contract; and failing to submit or certify drug-pricing and product information in a timely manner. In addition, the alert covers the changes in technical language proposed by OIG to clarify and more clearly define the scope of CMP regulations.
Continue Reading OIG Proposed Rule Would Expand Civil Monetary Penalty Authority

On May 9, 2014, the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) published a proposed rule that would significantly expand the exclusion regulations applicable to persons or entities that receive, directly or indirectly, funds from federal health care programs (the Proposed Rule). The Affordable Care Act (ACA) expanded the OIG’s authority for exclusion, and authorized the use of testimonial subpoenas in investigations of exclusion cases. In this Proposed Rule, the OIG incorporates these statutory changes, revises the definitions applicable to exclusions, proposes early reinstatement procedures, and offers a number of proposed policy changes as to when and how exclusions may take place.

Reed Smith has prepared a Client Alert that provides an overview of the Proposed Rule, including: proposed revisions to definitions; new grounds for exclusion; clarifications to existing regulations to add mitigating and aggravating factors; early reinstatement procedures; and proposed procedural changes in the OIG’s exclusion authorities In particular, we discuss the OIG’s assertion that there should be no statute of limitations within which it would have to seek exclusion. This limitless look-back authority could place a tremendous burden on providers and suppliers, since their conduct and compliance efforts could be second-guessed many years into the future, when supporting documentation and witnesses may be long gone. We also discuss how these proposed changes to the OIG’s exclusion authorities could impact the debarment authority applicable to government contracts more generally.
Continue Reading HHS OIG Proposes Expansion of Exclusion Authorities