Civil Monetary Penalties


In 1981, Congress added §1128A to the Social Security Act to authorize the Secretary of Health and Human Services to impose civil monetary penalties (CMPs). Since the enactment of the first CMP authority in 1981, Congress has increased both the number and types of circumstances under which CMPs may be imposed. Most of the specific statutory provisions authorizing CMPs also permit the Secretary to impose an assessment in addition to the CMP. An assessment is an additional monetary payment in lieu of damages sustained by the government because of the improper claim. Also, for many statutory violations, the Secretary may exclude the individual or entity violating the statute from participating in Medicare and other federal health care programs for specified periods of time.

In October 1994, the Secretary realigned the responsibility for enforcing these CMP authorities between the Centers for Medicare & Medicaid Services and the Office of the Inspector General. CMS was delegated the responsibility for implementing CMPs that involve program compliance. The OIG was delegated the responsibility for implementing CMPs that involve threats to the integrity of the Medicare or Medicaid programs, i.e., those that involve fraud or false representations.
 
On August 21, 1996, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was enacted. This law provides for higher maximum CMPs ($10,000 per false item or service on a claim or instance of non-compliance, instead of $2,000 per item or service), and higher assessments (three times the amount claimed, instead of twice the amount) for some of the violations.
 
In most cases for which the OIG may seek CMPs, the OIG may also seek exclusion from participation in all Federal health care programs. The OIG may seek CMPs for a wide variety of conduct. The OIG is authorized to seek different amounts of CMPs and assessments based on the type of violation at issue. For example, in a case of false or fraudulent claims, the OIG may seek a penalty of up to $10,000 for each item or service improperly claimed, and an assessment of up to three times the amount improperly claimed. In a kickback case, the OIG may seek a penalty of up to $50,000 for each improper act and damages of up to three times the amount of remuneration at issue (regardless of whether some of the remuneration was for a lawful purpose). Some cases settled by the OIG result from self-disclosures to the OIG (see the OIG self-disclosure protocol. When a health care provider appropriately self-discloses potentially fraudulent conduct, the OIG takes the self-disclosure and the provider’s level of cooperation into account when determining the appropriate settlement terms.
 
On October 30, 2009, interim final rules were published by the Department of Health and Human Services (HHS) to conform the enforcement regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) to the effective statutory revisions made pursuant to the Health Information Technology for Economic and Clinical Health Act (the HITECH Act), which was enacted as part of the American Recovery and Reinvestment Act of 2009 (ARRA). The interim final rules amended HIPAA’s enforcement regulations, as they relate to the imposition of civil money penalties, to incorporate the HITECH Act’s categories of violations, tiered ranges of civil money penalty amounts (as much as $50,000 per violation up to $1.5 million per year), and revised limitations on the Secretary’s authority to impose civil money penalties for established violations of HIPAA’s Administrative Simplification rules (HIPAA rules).

The following list describes the Social Security Act authorities under which CMS's Program Integrity Group and the OIG may impose civil money penalties, assessments, and/or exclusions for program non-compliance.
 
If your practice is in need of regulatory compliance consulting or health law services in order to lower your risk of being subject to Civil Monetary Penalties, contact John Little, Attorney at Law, PC.

CMPs delegated to CMS Program Integrity

Section 1806(b)(2)(B) Any person or entity that fails to provide an itemized statement describing each item or service requested by a Medicare beneficiary.
Section 1833(h)(5)(D) Any person billing for a clinical diagnostic laboratory test, other than on an assignment-related basis. This provision includes tests performed in a physician's office but excludes tests performed in a rural health clinic.
Section 1833(i)(6) Any person billing for an intraocular lens inserted during or after cataract surgery for which payment may be made for services in an ambulatory surgical center.
Section 1833(q)(2)(B) When seeking payment on an unassigned basis, any entity failing to provide information about a referring physician, including the referring physician's name and unique physician identification number.
Sections 1834(a)(11)(A) and 1842(j)(2) Any supplier of durable medical equipment charging for covered items (furnished on a rental basis) after the rental payments may no longer be made (except for maintenance and servicing) as provided in §1834(a)(7)(A) of the Act.
Section 1834(a)(17)(C) Unsolicited telephone contacts by any supplier of durable medical equipment to Medicare beneficiaries regarding the furnishing of covered services.
Sections 1834(a)(18)(B) and 1842(j)(2) Any durable medical equipment supplier that fails to make a refund to Medicare beneficiaries for a covered item for which payment is precluded due to an unsolicited telephone contact from the supplier.
Sections 1834(b)(5)(C) and 1842(j)(2) Any non-participating physician or supplier that charges a Medicare beneficiary more than the limiting charge as specified in §1834(b)(5)(B) of the Act for radiologist services.
Sections 1834(c)(4)(C) and 1842(j)(2) Any non-participating physician or supplier charging a Medicare beneficiary more than the limiting charge for mammography screening, as specified in §1834(c)(3) of the Act.
Sections 1834(h)(3) and 1842(j)(2) Any supplier of durable medical equipment, prosthetics, orthotics, and supplies charging for a covered prosthetic device, orthotic, or prosthetic (furnished on a rental basis) after the rental payment may no longer be made (except for maintenance and servicing.
Section 1834(h)(3) Unsolicited telephone contacts by any supplier of durable medical equipment, prosthetics, orthotics to Medicare beneficiaries regarding the furnishing of prosthetic devices, orthotics, or prosthetics.
Section 1834(j)(2)(A)(iii) Any durable equipment supplier that completes the medical necessity section on the certificate of medical necessity or fails to provide the fee schedule amount and the supplier's charge for the medical equipment or supply prior to distributing the certificate to the physician.
Sections 1834(j)(4) and 1842(j)(2) Any supplier of durable medical equipment, prosthetics, orthotics, and supplies that fails to make refunds in a timely manner to Medicare beneficiaries (for items or services billed on a non-assigned basis) if the supplier does not possess a Medicare supplier number, if the item or service is denied in advance, or if the item or service is determined not to be medically necessary or reasonable.
Sections 1834(k)(6) and 1842(j)(2) Any practitioner or other person that bills or collects for outpatient therapy services or comprehensive outpatient rehabilitation services on a non-assigned basis.
Section 1842(b)(18)(B) For practitioners specified in §1842(b)(18)(C) of the Act (physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, and clinical psychologists), any practitioner billing (or collecting) for any services on a non-assigned basis.
Section 1842(k) Any physician presenting a claim or bill for an assistant at cataract surgery performed on or after March 1, 1987.
Section 1842(l)(3) Any non-participating physician who does not accept payment on an assigned basis and who fails to refund beneficiaries for services that are not reasonable or medically necessary or are of poor quality.
Section 1842(m)(3) Any non-participating physician billing for an elective surgical procedure on a non-assigned basis, who charges at least $500, fails to disclose charge and coinsurance amounts to the Medicare beneficiary prior to rendering the service, and fails to refund any amount collected for the procedure in excess of the charges recognized and approved by the Medicare program.
Section 1842(n)(3) Any physician billing diagnostic tests in excess of the scheduled fee amount.
Section 1842(p)(3)(A) Any physician that fails to promptly provide the appropriate diagnosis code or codes upon request by CMS or a carrier on any request for payment or bill submitted on a non-assigned basis.
Section 1842(p)(3)(B) Any physician failing to provide the diagnosis code or codes after repeatedly being notified by CMS of the obligations on any request for payment or bill submitted on a non-assigned basis.
Section 1848(g)(1)(B) Any non-participating physician, supplier, or other person who furnishes physicians' services and bills on a non-assigned basis, or collects in excess of the limiting charge, or fails to make an adjustment or refund to the Medicare beneficiary.
Section 1848(g)(3) Any person billing for physicians' services on a non-assigned basis for a Medicare beneficiary who is also eligible for Medicaid (these individuals include qualified Medicare beneficiaries).
Section 1848(g)(4) Any physician, supplier, or other person (except one excluded from the Medicare program) that fails to submit a claim for a beneficiary within one year of providing the service; or imposes a charge for completing and submitting the standard claims form.
Section 1862(b)(5)(C) Any employer who (before October 1, 1998) fails to provide an employee's group health insurance coverage information to the Medicare contractor.
Section 1862(b)(6)(B) Any entity that fails to complete a claim form relating to the availability of other health benefit plans, or provides inaccurate information relating to the availability of other health plans on the claim form.
Section 1877(g)(5) Any person failing to report information concerning ownership, investment, and compensation arrangements.
Section 1879(h) Any durable medical equipment supplier (including a supplier of durable medical equipment, prosthetic devices, prosthetics, orthotics, and supplies) failing to make refunds to Medicare beneficiaries for items or services billed on an assigned basis if the supplier did not possess a Medicare supplier number, if the item or service is denied in advance, or if the item or service is determined to be not medically necessary or reasonable.
Section 1882(a)(2) Any person who issues a Medicare supplemental policy that has not been approved by the state regulatory program or does not meet federal standards.
Section 1882(p)(8) Any person who sells or issues non-standard Medicare supplemental policies. (This violation may cause an assessment and an exclusion.)
Section 1882(p)(9)(C) Any person who sells a Medicare supplemental policy and fails to make available the core group of basic benefits as part of its product line; or fails to provide the individual (before the sale of the policy) an outline of coverage describing the benefits provided by the policy.
Section 1882(q)(5)(C) Any person who fails to suspend a Medicare supplemental policy at the policyholder's request (if the policyholder applies for and is determined eligible for Medicaid); or to automatically reinstate the policy as of the date the policyholder loses medical assistance eligibility (and the policyholder provides timely notice of losing his or her Medicaid eligibility).
Section 1882(r)(6)(A) Any person that fails to refund or credit as required by the supplemental insurance policy loss ratio requirements.
Section 1882(s)(4) Any issuer of a Medicare supplemental policy that does not waive any time periods applicable to pre-existing conditions, waiting periods, elimination periods, or probationary periods if the time periods were already satisfied under a preceding Medicare policy; or denies a policy, conditions the issuance or effectiveness of the policy, or discriminates in the pricing of the policy based on health status or other criteria.
Section 1882(t)(2)
Any issuer of a Medicare supplemental policy who fails to provide medically necessary services to enrollees through the issuer's network of entities; imposes premiums on enrollees in excess of the premiums approved by the state; acts to expel an enrollee for reasons other than non-payment of premiums; does not provide each enrollee at the time of enrollment with specific information regarding policy restrictions; or fails to obtain a written acknowledgment from the enrollee of receipt of the information.
 
If your practice is in need of regulatory compliance consulting or health law services in order to lower your risk of being subject to Civil Monetary Penalties, contact John Little, Attorney at Law, PC.

CMPs delegated to OIG

Section 1128(a)(1)(A), (B) False or fraudulent claim for item or service including incorrect coding (upcoding) or medically unnecessary services.
Section 1128A(a)(1)(C) Falsely certified specialty.
Section 1128A(a)(1)(D) Claims presented by excluded party.
Section 1128A(a)(1)(E) Pattern of claims for unnecessary services or supplies.
Section 1128A(a)(2) Assignment agreement, Prospective Payment System (PPS) abuse violations.
Section 1128A(a)(3) PPS false/misleading information influencing discharge decision.
Section 1128A(a)(4) Excluded party retaining ownership or controlling interest in participating entity.
Section 1128A(a)(5) Remuneration offered to induce program beneficiaries to use particular providers, practitioners, or suppliers.
Section 1128A(a)(6) Contracting with an excluded individual.
Section 1128A(a)(7) Improper remuneration; i.e., kickbacks.
Section 1128A(b) Hospital physician incentive plans.
Section 1128A(b)(3) Physician falsely certifying medical necessity for home health benefits.
Section 1128E(b) Failure to supply information on adverse action to the Health Integrity and Protection Data Bank (HIPDB).
Section 1140(b)(1) Misuse of Departmental symbols/emblems.
Section 1819(b)(3)(B) False statement in assessment of functional capacity of skilled nursing facility (SNF) resident.
Section 1819(g)(2)(A) Notice to SNF/nursing facility of standard scheduled survey.
Section 1857(g)(1)(F) Managed care organization (MCO) fails to comply with requirements of §1852(j)(3) or §1852(k)(2)(A)(ii). (Prohibits MCO interference with the provider's advice to an enrollee; mandates that providers not affiliated with the MCO may not bill or collect in excess of the limiting charge.)
Section 1860D-31(i)(3) Engaged in false or misleading marketing practices under the Medicare prescription drug discount card program; or overcharge prescription drug enrollees; or misuse of transitional assistance funds.
Section 1862(b)(3)(c) Financial incentives not to enroll in a group health plan.
Section 1866(g) Unbundling outpatient hospital costs.
Section 1867 Dumping by hospital/responsible physician of patients needing emergency medical care.
Section 1876(i)(6)(A)(i), Section 1903(m)(5)(A)(i), Section 1857(g)(1)(A) Failure by Health Maintenance Organization (HMO)/competitive medical plan/MCO to provide necessary care affecting beneficiaries.
Section 1876(i)(6)(A)(ii), Section 1903(m)(5)(A)(ii), Section 1857(g)(1)(B) Premiums by HMO/competitive medical plan/MCO in excess of permitted amounts.
Section 1876(i)(6)(A)(iii), Section 1903(m)(5)(A)(iii), Section 1857(g)(1)(C) HMO/competitive medical plan/MCO expulsion/refusal to re-enroll individual per prescribed conditions.
Section 1876(i)(6)(A)(iv), Section 1903(m)(5)(A)(iii), Section 1857(g)(1)(D) HMO/competitive medial plan/MCO practices to discourage enrollment of individuals.
Section 1876(i)(6)(A)(v), Section 1903(m)(5)(A)(iii), Section 1857(g)(1)(E) False or misrepresenting HMO/competitive medical plan/MCO information to Secretary.
Section 1876(i)(6)(A)(vi), Section 1903(m)(5)(A)(v), Section 1857(f) Failure by HMO/competitive medical plan/MCO to assure prompt payment for Medicare risk-sharing contracts only or incentive plan provisions.
Section 1876(i)(6)(A)(vii), Section 1857(g)(1)(G) HMO/competitive medical plan/MCO hiring/employing person excluded under §1128 or §1128A.
Section 1877(g)(3) Ownership restrictions for billing clinical lab services.
Section 1877(g)(4) Circumventing ownership restriction governing clinical labs and referring physicians.
Section 1882(d)(1) Material misrepresentation referencing compliance of Medicare supplemental policies (including Medicare + Choice).
Section 1882(d)(2) Selling Medicare supplemental policy (including Medicare + Choice) under false pretense.
Section 1882(d)(3)(A) Selling health insurance that duplicates benefits.
Section 1882(d)(3)(B) Selling or issuing Medicare supplemental policy (including Medicare + Choice) to a beneficiary without obtaining a written statement from beneficiary with regard to Medicaid status.
Section 1882(d)(4)(A) Use of mailings in the sale of non-approved Medicare supplemental insurance (including Medicare + Choice).
Section 1891(c)(1) Notifying home health agency of scheduled survey.
Section 1927(b)(3)(B) False information on drug manufacturer survey from manufacturer/wholesaler/seller.
Section 1927(b)(3)(C) Provision of untimely or false information by drug manufacturer with rebate agreement.
Section 1929(i)(3) Notifying home- and community-based care providers/settings of survey.
Section 421(c) of the Health Care Quality Improvement Act (HCQIA) Failure to report medical malpractice liability to National Practitioner Data Bank.
Section 427(b) of HCQIA Breaching confidentiality of information report to National Practitioner Data Bank.
 
If your practice is in need of regulatory compliance consulting or health law services in order to lower your risk of being subject to Civil Monetary Penalties, contact John Little, Attorney at Law, PC.