The Stakes are Higher: Penalties for Violations Increase

As 2016 comes to a close, we want to take a step back and look at the actions the OIG and DOJ have taken over the year and how it may impact your physician contracts and strategy in 2017.

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The Bipartisan Budget Act of 2015 mandated that federal agencies adjust civil monetary penalty amounts for inflation. Furthermore, the Budget Act allowed agencies to make “catch-up” adjustments. This has resulted in substantial increases in fines since False Claims Act penalties have not been adjusted in 20 years. The fines for False Claims Act violations are now $10,781 at the minimum and $21,563 at the maximum. Stark Law fines increased from $15,000 to $23,863 per violation and Anti-Kickback Statute fines increased from $50,000 to $73,588. The penalties are expected to increase further based on inflation each year.

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Healthcare organizations with violations will face much larger fines. The potential impact could be crippling for some organizations. Preventing violations is even more important now since we expect to see record-setting fines and settlements with healthcare entities in 2017.

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False Claims at the Center of Focus

Stark and the Anti-Kickback Statute have always been driving factors in physician contract regulation, however, over the past few years, we have seen False Claims become more and more prominent in improper physician payments cases. The False Claims Act applies to any fraudulent payment collected from the government (including some Stark and Anti-Kickback violations). Experts predict that the False Claims Act will continue to be a significant risk for health care organizations since False Claims Act penalties substantially increase the potential repayment amount of many violations.

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Advice for the New Year

There are many uncertainties about the future of healthcare, including reforms to Stark law. However, the risks of improper payment to physicians are likely to continue.

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The beginning of a new year is a good time to assess your compliance and documentation process and revamp physician contracting processes to mitigate risks. If you need ideas on physician contracting best practices, check out our guide.

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