The FCA continues to be the federal government’s primary civil enforcement tool for investigating allegations that healthcare providers or government contractors defrauded the federal government. In the coming weeks, we continue to take a closer look at recent legal developments involving the FCA. This week, we examine developments regarding penalties and damages under the FCA, which make the FCA such a potent enforcement tool for the government.

For providers facing potential FCA liability, the potential scope of exposure will continue to expand, whether driven by a nearly doubled increase in the penalties recoverable under the FCA, large negotiated settlements backed-up by statistical extrapolation of false claims, or the significant increase in relator-driven litigation in government-declined cases. Questions regarding the manner in which FCA damages should be calculated also are likely to persist.

Continue Reading FCA Deeper Dive: Developments Regarding Penalties and Damages

The Railroad Retirement Board (RRB) became the first federal agency to increase FCA penalties pursuant to the Bipartisan Budget Act of 2015 (Budget Act), which was signed into law last November. The penalties announced by the RRB nearly doubled the prior penalty levels, with the minimum penalty skyrocketing from $5,500 to $10,781 and the maximum penalty from $11,000 to $21,563. As we covered here, the Budget Act amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment Act) to require federal agencies to increase civil monetary penalties imposed by the FCA as a “catch up adjustment” to compensate for inflation. The Budget Act also requires agencies to make annual adjustments to penalties in the future.

Continue Reading Agency Announces Rule Doubling FCA Penalties

Signed into law on November 2, 2015, the Bipartisan Budget Act of 2015 requires federal agencies to increase civil monetary penalties imposed by the FCA to account for inflation. The increase – referred to as a “catch up adjustment” – will be implemented through interim final rulemaking procedures under the Administrative Procedures Act and must be in place by August 1, 2016. The amount of the adjustment is based on the difference between the CPI in October of the calendar year in which the penalty was last adjusted and the CPI in October 2015. FCA penalties were increased to their present level in 1999. In addition, the Budget Act requires agencies to continue to make annual adjustments to penalties moving forward, also based on changes in the CPI. Those annual adjustments are automatic and will be implemented without rulemaking procedures or any agency assessment of the need for such an increase.

Continue Reading Bipartisan Budget Act Increases FCA Penalties