Beginning August 1, 2016, penalties under the False Claims Act have almost doubled.
Based on the interim final rule published by the Department of Justice (DOJ) on June 30, the mandatory minimum penalty for fraudulent claims has increased from $5,500 to $10,781 per claim, and the mandatory maximum penalty has increased from $11,000 to $21,563.
“The FCA imposes civil liability on any person who knowingly submits, or causes the submission of, a false or fraudulent claim to the Federal government,” according to a Medicare Learning Network Fraud and Abuse fact sheet. The standard for “knowing” under this statute includes both “deliberate ignorance” and “reckless disregard” when submitting fraudulent claims to the government.
A criminal FCA statute also subjects individuals or entities to criminal penalties if they are found guilty of submitting false claims.
According to Becker’s Hospital Review, the penalty increases were mandated as part of the Bipartisan Budget Act of 2015 which called for inflationary “catch-up adjustments” to federal penalties. A National Law Review article indicated that False Claims Act penalties haven’t been updated since 1996.
The DOJs ruling took effect August 1, 2016, and applies to claims violations after November 2, 2015.
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