Double the Trouble

It’s official. Effective August 1, 2016, penalties for violating False Claims Act (FCA) have doubled.  The DOJ published an Interim Rule annoucing their intent to increase the minimum per claim penalty from $5,500 to $10,781 and increase the maximum per claim penalty from $11,000 to $21,563, plus three times the amount of damages that the federal government sustains because of the false claim. The last time these fines had been raised was 1999.

The False Claims Act is a federal law that prohibits anyone from submitting false or fraudulent claims to the federal government for payment. Specifically, the False Claims Act imposes liability on any person who, “knowingly presents or causes to be presented a false or fraudulent claim for payment or approval; knowingly makes, uses or causes to be made or used, a false record or statement material to a false or fraudulent claim; conspires to commit a violation of the False Claims Act….or knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” See 31 U.S.C. § 3729(a).

Explicit Provisions

The False Claims Act also contains explicit provisions that provide financial incentives for individuals, known as relators or “whistleblowers,” to allege fraud on behalf of the federal government and receive a percentage of the monetary recovery for their efforts and information.

NOTE: When False Claims Act penalties increase, so do the financial rewards for whistleblowers, increasing their incentive to allege false or fraudulent claims.

Written by Michael Rosen, ESQ
ProviderTrust Co-Founder, mrosen@providertrust.com

Michael brings over 20 years of experience founding and leading risk mitigation businesses, receiving numerous accolades such as: Inc Magazine’s Inc 500 Award and Nashville Chamber of Commerce Small Business of the Year
Connect with Michael on Linkedin

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