Recently, the United States Department of Health and Human Services Office of Inspector General (HHS OIG) released a final rule amending the agency’s civil monetary penalty (CMP) regulations and implementing the 21st Century Cures Act amendment to the law. Among other things, the amendment allows HHS to impose CMPs, assessments, and exclusions upon individuals and entities that engage in fraud and other misconduct related to HHS grants, contracts, and other agreements.
New CMP Offenses
Included in the final rule are several new CMP offenses related to fraud and other misconduct involving grants, contracts, and other agreements for which the HHS Secretary provides funding when a person, excluding a program beneficiary, does one of the following:
- knowingly presents or causes to be presented a specified claim under such grant, contract, or other agreement that the person knows or should know is false or fraudulent;
- knowingly makes, uses, or causes to be made or used, any false statement, omission, or misrepresentation of a material fact in any application, proposal, bid, progress report, or other document that is required to be submitted in order to directly or indirectly receive or retain funds provided in whole or in part by such Secretary pursuant to such grant, contract, or other agreement;
- knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent specified claim under such grant, contract, or other agreement;
- knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit funds or property to such Secretary with respect to such grant, contract, or other agreement, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit funds or property to such Secretary with respect to such grant, contract, or other agreement; or
- fails to grant timely access, upon reasonable request, to the Inspector General of the Department, for the purpose of audits, investigations, evaluations, or other statutory functions of such Inspector General in matters involving such grants, contracts, or other agreements.
Penalties, Assessments, and Exclusion
The final rule also included statutory penalties for each of the five aforementioned offenses, ranging from $10,000 to $50,000 (maximum) penalties per offense, as measured by the offense trigger. HHS OIG is also permitted to impose an assessment of no more than three times the amount involved with the improper conduct and may also impose an exclusion from federal health care programs.
Aggravating and Mitigating Factors
The final rule also outlined factors for HHS OIG to consider when determining the severity of penalties, assessments, and the period of exclusion. The list of aggravating factors is not exhaustive, but includes the following: if the violations were of several types or occurred over a lengthy period of time; if there were many such violations (i.e., a pattern of false or fraudulent specified claims, requests for payment, or a pattern of violations); the amount requested, claimed, or related to the violations was $50,000 or above; or the violation resulted (or could have resulted) in physical harm to an individual.
A mitigating factor may be considered if the following conditions are all met: all of the violations were of the same type and occurred within a short period of time; there were few such violations; and the total amount claimed or requested related to the violations was less than $5,000.
Enforcement
While the final rule is not limited to just intentional or egregious wrongdoing, HHS OIG did note that it will consider all relevant facts and circumstances surrounding the allegations of wrongdoing when making ultimate determinations, including penalties, assessments, and exclusion.
Information Blocking Also Included in the Final Rule
The final rule also addresses the Public Health Services Act amendment that allows HHS OIG to investigate claims of information blocking and allowing the HHS Secretary the ability to impose CMPs for information blocking.