Inflation Leads to Hike in Civil Monetary Penalties, Greater Rewards for Whistleblowers

Companies and individuals who defraud government healthcare programs, as well as the whistleblowers who report those committing the fraud, could be seriously affected by a recent federal budget deal. Under the terms of the government’s new budget, codified in the Bipartisan Budget Act of 2015, healthcare providers who commit Medicare or Medicaid fraud or who violate the federal False Claims Act will now be subject to much higher fines and other monetary penalties.

The budget, which was signed into law by President Obama on Nov. 2, adjusts civil monetary penalties in order to keep up with inflation. A provision in the law requires regulatory agencies to makes these adjustments by August 2016. This provision was included because many federal statutes have not accounted for inflation in nearly three decades. In the case of the federal False Claims Act, the penalties have not changed since 1999.

The new law offers a major upside to anyone pursuing a qui tam action under the False Claims Act or any other statute covering health care fraud. Qui tam law provides whistleblowers with an opportunity to share in the recovered funds, so an increase in civil monetary penalties could mean an increase in the amount of money that whistleblowers can potentially recover.

Under the False Claims Act, anyone who tries to cheat the government by submitting dishonest claims for reimbursement from federal health programs such as Medicare and Medicaid can incur heavy fines – some portion of which whistleblowers may be entitled to. As a result, whistleblowers have strong incentives to report anyone who commits health care fraud. In fact, the penalties for violating the False Claims Act, as well as the potential rewards for reporting violators, could rise by as much as 40 percent under the new federal budget deal.

If you believe you have information that may lead to uncovering health care fraud or any other crime against the government under the False Claims Act, contact experienced qui tam attorney Ross Begelman of Begelman & Orlow for a free consultation.