HHS OIG penalties vary depending on the nature of the offense, the scale of the offense, and the cooperation of the violating party during the investigation of the offense. Other factors that can influence HHS OIG penalties include the regulatory limits applied to each type of violation and the violating party’s previous history of compliance with healthcare regulations.
Among its many roles, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) is responsible for investigating allegations of fraud, waste, and abuse in Federal healthcare programs. When HHS OIG identifies fraud, waste, or abuse, it has the authority to recover funds, exclude individuals and organizations from Federal healthcare programs, and pursue civil monetary penalties or criminal penalties depending on the nature of the offense.
The amount of HHS OIG penalties is calculated on a case-by-case basis, and quite often cases can be settled for a mutually agreed amount to avoid potential litigation. The amount of HHS OIG penalties can also be reduced if the violating individual or organization agrees to comply with a Corporate Integrity Agreement. In these cases, compliance with a Corporate Integrity Agreement can save an individual or organization from being added to the HHS OIG Exclusions List.
How HHS OIG Enforcement Actions Unfold
The department of HHS OIG responsible for enforcement actions is the Office of Investigations. The Office of Investigations can be alerted to possible fraud, waste, or abuse by other departments of HHS OIG – for example, the Office of Audit Services or the Office of Evaluation and Inspection – by other operating divisions of HHS – for example, HHS’ Office for Civil Rights – or by members of the public and healthcare employees via the HHS OIG Complaints Hotline.
The Office of Investigations prioritizes HHS OIG enforcement actions according to the nature and scale of the alleged offense and the evidence to support the allegation. The Office then issues subpoenas to acquire documents from the accused “target”, conducts interviews with witnesses and/or employees, and conducts inspections of the target’s workplace. The additional evidence is then reviewed to determine what laws and regulations have been violated.
Depending on the outcome of the reviews, HHS OIG enforcement actions can be settled by mutual consent, by an administrative hearing, or by a court if the offense is criminal in nature. The location can also have an influence on the outcome of HHS OIG enforcement actions if a state law has harsher penalties for a violation than the equivalent Federal law. For example, under California’s WIC Code §15630(h), the failure to report elder abuse carries a jail term of up to one year.
How Regulatory Limits Affect HHS OIG Penalties
State laws aside, the amount of HHS OIG penalties is governed by the regulatory limits of whatever federal law the target has violated. For example, the current (February 2024) regulatory limits for civil violations of the False Claims Act are a minimum civil monetary penalty of $13,946 and a maximum civil monetary penalty of $27,894 per violation. The HHS OIG can also add fines of up to three times the amount falsely claimed from an HHS program.
If the violation of the False Claims Act is criminal, HHS OIG penalties increase to a maximum fine of $500,000 for organizations and $250,000 for individuals. For individuals, criminal convictions under the False Claims Act can also carry a jail term of up to five years. These HHS OIG penalties apply to each individual count filed, and are in addition to penalties prosecutors may seek for conspiracy to defraud the United States, mail fraud, wire fraud, or other federal crimes.
Other laws have different regulatory limits. For example, hospitals that violate the Emergency Medical Treatment and Active Labor Act (EMTALA) are subject to civil penalties of between $64,618 and $129,233 per violation, violations of the HHS OIG Anti-Kickback Regulations can attract fines of up to $27,894 (plus jail terms), while the penalties for violations of the OIG Stark Law are up to $15,000 per item or service charged to an HHS program plus up to $100,000 per arrangement considered a deliberate attempt to circumnavigate the Anti-Kickback Regulations.
Why HHS OIG Sanctions are Sometimes Combined
It is not unusual to read HHS press releases announcing multi-million dollar settlements that appear to be more than the maximum civil monetary penalty multiplied by the number of violations – even allowing for the recovery of three times the funds falsely claimed from an HHS program. This is because HHS OIG sanctions can be combined if (for example) a physician has violated the OIG Stark Law by accepting a non-excluded kickback which then results in a false claim to an HHS program.
By combining HHS OIG sanctions, the Office of Investigations can negotiate one financial settlement with an individual or organization rather than multiple settlements, and impose a more relevant Corporate Integrity Agreement (if applicable). Alternatively, the department can exclude an individual or organization from HHS programs for a longer period of time than if each set of HHS OIG Sanctions had been dealt with independently of each other.
The takeaway from this is that there is no specific answer to the question how much are HHS OIG penalties. In the worst possible scenario, violators of Federal healthcare laws can be fined millions of dollars and/or jailed, and be excluded from HHS programs. Due to the risk of effectively losing the business, individuals and organizations concerned that they may not be complying with all applicable healthcare regulations should seek compliance advice from a legal professional.
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