The U.S. Department of Health and Human Services (HHS) issued an interim final rule Sept. 2nd that raises various civil monetary penalty amounts to adjust for years of inflation.
“The Department of Health and Human Services (HHS) is promulgating this interim final rule to ensure that the amount of civil monetary penalties authorized to be assessed or enforced by HHS reflect the statutorily mandated amounts and ranges as adjusted for inflation. Pursuant to Section 4(b) of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act), HHS is required to promulgate a “catch-up adjustment” through an interim final rule. The 2015 Act specifies that the adjustments shall take effect not later than August 1, 2016,” HHS stated in the interim final rule.
The rule noted the new maximum penalties apply to any fines assessed after Aug. 1, 2016, as well as all penalties stemming from violations that took place after Nov. 2, 2015.
Under the interim final rule, some civil monetary penalties will nearly double due to inflation adjustments.
HHS increased the penalty for a HMO or competitive medical plan that implements practices to discourage enrollment of individuals needing services in the future by 106 percent from $100,000 to $206,000. Hospitals with 100 beds or more now face penalties of more than $103,000 if they dump patients needing emergency medical care. That’s up from the $50,000 penalty established in 1987.
Circumventing Stark Law’s restrictions on physician self-referrals will now cost $159,000, a 59 percent increase from the original $100,000 penalty established in 1994.
Some penalties are relatively small, such as the penalty for payments by a hospital or critical access hospital to induce a physician to reduce or limit services to individuals under the direct care of the physician or who are entitled to certain medical assistance, which increased 115 percent from $2,000 to $4,300.
Many updated penalties affect both Medicare and Medicaid managed-care companies. HHS raised the penalty for a Medicare Advantage organization that improperly expels or refuses to reenroll a beneficiary by 47 percent, from $25,000 to $36,794. Medicare Advantage organization that substantially fail to provide medically necessary, required items and services will now face penalties of more than $37,000, an increase from $25,000. The penalty for a Medicare Advantage organization that charges excessive premiums went up from $25,000 to $36,794.
And, a Medicaid MCO that improperly expels or refuses to reenroll a beneficiary now faces a $197,000 monetary penalty, up from $100,000.