New Civil Monetary Penalty authorities for OIG

The Department of Health and Human Services (HHS) Office of Inspector General’s (OIG) final rule on its revised civil monetary penalties (CMP) could have a significant impact on hospitals and other health care providers, according to health care attorney Gabe Imparato of the Fort Lauderdale-based firm Broad & Cassel. He says that while most of the changes are not unexpected, since they were mandated by the 1996 Health Insurance Portability and Accountability Act, providers should study the changes carefully.

For example, Imperato points out that the new CMP authorities apply to all federal health care programs, including Tricare, Veteran’s Administration and public health service programs, not just Medicare and Medicaid. "That is a pretty significant change," says Imperato, a leading authority in this area.

In addition, the amounts of the penalties under the CMP law have been raised to the equivalent of the penalties under the False Claims Act, which is up to $10,000 per false claim, false item or service, and triple damages.

Another significant change is that CMPs will now apply to companies and company officers who retain excluded individuals as employees. "You can now fine the entity," Imperato asserts. "That puts a burden on entities to make sure that they know who they are employing or who they are contracting with, because if they are on the excluded individuals list, they are exposing themselves to civil money penalties."

According to Imperato, the new CMPs also address offering inducements to beneficiaries, including "courtesy issues" such as waiver of co-insurance. "That is important because they actually talk about waivers that are exempt," notes Imperato.

For example, under certain conditions, specific waivers of deductibles and co-insurance would be deemed acceptable.

These include waivers of co-insurance and deductible amounts that are not routine and are not solicited or advertised but rather based on an individualized determination of financial need, he says.

They also include any incentives given to individuals to promote the delivery of preventive care, says Imperato. "That is no different than current law, but this is one of the first times that we have seen explicit types of waiver and co-insurance that they will accept," he adds.

According to Imperato, the other important change included in the regulations is the "state of mind" standard under the CMP law. "It used to be that the Secretary of HHS could impose a civil money penalty where responding parties either knew or should have known that they were violating the law, which is almost a negligence standard," he explains.

But HIPAA changed that standard to make it consistent with the standard in the False Claims Act, which requires deliberate disregard or deliberate ignorance of what the rules of the program are or knowing and willful conduct, says Imperato.

At least in theory, Imperato says that means the net effect of the proposed rule is to toughen the sanctions but also to create a higher standard of proof.

To see the entire regulation, go to