After proposals to raise the limits on false claims penalties were put forth earlier this year, federal authorities announced that the increase will take place by the beginning of August of this year.

The change will raise the minimum penalty for a violation of the False Claims Act (FCA) from $5,500 to $10,781 and increase the maximum penalty from $11,000 to $21,563. The penalties are being modified as a result of the Bipartisan Budget Act of 2015, which stated that agencies must adjust civil penalties for inflation over the past 30 years.

In addition to complying with the law, the increased penalty amounts should likely serve as an increased deterrent against fraud, especially in the home health care industry with respect to Medicare fraud. Moreover, because whistleblowers are eligible to receive a reward of a percentage of any penalties, such rewards may be larger as the penalties increase.  This could increase the incentive for employees to blow the whistle on employers who are violating the law.

Authorities have intensified their investigations into Medicare fraud as of late, including the recent takedown of the largest Medicare fraud ring to date: the bust represented more than $900 million in fraudulent billings, according to U.S. Attorney General Loretta Lynch.

The False Claims Act penalties increase also closely followed the Supreme Court’s ruling that may lead to an increase in filings of FCA cases. In that court case, the Supreme Court ruled that implied false certification theory can be a basis for a FCA case when a party submitting the claim makes specific representations about its services but fails to disclose its non-compliance with relevant rules and laws.

Do you believe you have a claim to file under the False Claims Act?

If you believe your employer is over-charging the U.S. government or a state government or otherwise breaking the law and you are interested in being a whistleblower, contact us at Dimond Kaplan & Rothstein, P.A. for a free consultation.

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