Penalties surge under new law

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The new federal budget could prove costly for accused providers.

Daily fines levied against operators charged with regulatory violations can now double to more than $20,000. The largely overlooked surge is expected to hit operators with a large Medicaid census especially hard.

“Any time I see a 100% increase in an upper level of [civil monetary penalties], the ability to impose that and the impact that can have on a provider who is caring for primarily a Medicaid population, that's a devastating thought,” said Lyn Bentley, senior director of regulatory services for the American Health Care Association.

One possible safety valve: The HHS secretary can mandate a less steep increase should adverse outcomes appear likely.

False Claims Act fines could also increase by 40%, under an inflation adjuster in the new law. As a result, related civil monetary penalties can now top $15,000 a day. Such fines could pile up quickly, as they frequently involve hundreds of allegedly bogus claims. Moreover, the law lets the government pursue triple the amount of money lost.