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Find-A-Code Focus Newsletter

False Claim Penalties Increase Again

April 14, 2017

On February 3, 2017, the Department of Justice (DOJ) issued a Final Rule to increase the civil monetary penalties assessed under the False Claims Act (FCA), due to inflation for the year 2017, to an all-time high of $10,957 (minimum) to $21,916 (maximum). Thirty years ago, in 1986, Congress amended the False Claims Act to provide the government with a more effective way of protecting against false claims and fraud in waste and abuse of federal monies used to fund healthcare programs like Medicare, Medicaid, and TRICARE. At that time, they set the fines at $5,000 (minimum) to $10,000 (maximum) per false claim submitted to these federally funded programs. Since that time, we have seen those penalties first raised to $5,500-$11,000 and just last August (2016) they almost doubled the previous penalty rate, raising them to a minimum of $10,781.40 and maximum of $21,562.80 per claim. 

This new announcement has some people asking "Are these fines and penalties too steep?" Such significant increases in penalties have raised concerns of whether the government has gone too far and whether or not there is recourse under the Eighth Amendment of the Constitution, which states, "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." In the 2016 fiscal year ending September 30th, the DOJ obtained more than $4.7 billion in settlements and judgments from civil cases involving fraud and false claims according to Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department's Civil Division.

Looking at these settlement numbers, your organization MUST ask this important question: "Have we implemented a solid compliance plan to address potential risk?" It is essential to have an internal compliance program for your organization, which includes regular auditing of medical records and claims reporting to ensure proper documentation and coding practices are in place. Training and education should be a vital part of the compliance program to aid providers and staff, responsible for documenting and coding medical claims, understand the requirements of these federally-funded healthcare programs.

Getting Help

To learn more about compliance, get our specialty-specific Reimbursement Guides and DeskBooks. They offer guidance about important reimbursement issues facing your specialty and the industry as a whole, including documentation standards, common billing problems, and compliance regulations related to these OIG fine increases. CLICK HERE for more information.

Remember: Find-A-Code offers important coding information on the code information page (e.g., NCCI Edits, Cross-A-Code™, Medicare Payer Guidelines, Commercial Payer Policies), as well as helpful tools such as Scrub-A-Claim™.


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