The civil monetary penalties for violations of healthcare laws and regulations are on the rise. A few months back, we discussed the sharp increase in penalties under the Federal False Claims Act (FCA).
With the initiation of an interim final rule, the per-claim FCA penalty was nearly doubled by the Department of Justice.
The reason behind this increase is that the Federal Civil Penalties Inflation Adjustment Act of 2015 deemed it necessary for Federal agencies to update civil monetary penalties (CMPs) within their jurisdiction by the 1st of August 2015, to catch up with inflation.
In addition to the FCA, several other CMPs have recently increased or are likely to increase due to the 2015 Adjustment Act.
For instance, the criminal healthcare fraud statute provides strict penalties for fraudulent claims submitted to Federal and State programs, including Medicare and Medicaid.
Compliance with the Anti-Kickback Statute is critical, as penalties for violations of this law have risen significantly.
Previously, the CMPs stood at about $50,000 and have now been raised to $73,588.
Additionally, there are potential criminal fines that stand at about $25,000 per violation, which further highlights the consequences of fraud in the healthcare industry.
Do You Really Know Your Spend Data?
The steep rise in CMPs for violations of the complex regulatory landscape in which the pharma industry operates has led to the need for robust compliance programs.
If anything, reporting entities, i.e., life sciences companies, need to get their data right.
What this means is that their data needs to be complete, accurate, and supported by appropriate documentation.
Ensuring compliance with life sciences compliance regulations and healthcare fraud laws requires organizations to closely monitor their financial transactions and interactions with healthcare providers.
What’s most important is that they understand what their data is saying about them and their practices pertaining to interactions with physicians and teaching hospitals – and this is where Open Payments Analytics comes in.
Open Payments Analytics helps organizations comply with regulatory compliance for life sciences by offering deep insights into financial transactions.
There are many different aspects of their data that pharma manufacturers should be aware of:
- What is the breakdown of payments by payment type and dollar volume?
- Who are the highest-paid physicians?
- Are physicians receiving both promotional payments (such as speaker or consulting fees) and research payments?
- Are there any anomalies that might trigger a healthcare fraud investigation?
Dedicated to helping pharma companies inspect their commercial expenses for accuracy and completeness, Open Payments Analytics assists in understanding what is in the data, including how budgets are being spent from a promotional, research, and investment standpoint.
All these elements are critical to ensure that appropriate resources are being allocated by the company to address risks and conflicts.
Companies that fail to comply with laws against healthcare fraud risk facing severe penalties, including those under the anti-kickback statute penalties and the Patient Access and Medicare Protection Act.
Getting Ahead of Your CMS Open Payments Data
Pharma companies often get surprised by what’s in their data. However, this is often not evident without significant digging with the help of an analytics tool like Open Payments Reporting solution. Some get surprised when their reported payments are brought to light publicly by a third party. How might this data be used by individuals to initiate lawsuits against your company? How will this data be used by law enforcement agencies together with investigative inquiries or enforcement actions? Know your data better than anyone else – don’t let it surprise you later!
The best thing for you to do, as a pharma company, is to start off by performing a high-level analysis of your data to gain a better understanding of your baseline payment patterns and identify potential outliers. Healthcare fraud detection strategies can help companies detect suspicious transactions before they escalate into legal issues.
This can easily be done with a data analytics solution like Open Payments Analytics. With Open Payments Analytics, not only will you be able to identify payment trends but also spot outliers on your pre-submission data that might later require additional follow-up. With this information at hand, you will have the potential to further investigate your data anomalies and be prepared to respond to external inquiries regarding your company’s spend information.
Understanding compliance laws in life sciences is essential for avoiding potential fraud penalties. Federal and State laws require organizations to maintain transparency and ensure accurate reporting of financial transactions. Healthcare fraud penalties are increasing, and failure to comply with Medicare fraud laws or the Health Care Fraud and abuse Statute can lead to serious legal consequences, including administrative civil monetary penalties and penalties for violating the Federal False Claims Act.
The Role of Data in Preventing Healthcare Fraud
Fraud prevention in healthcare relies heavily on data analytics. By leveraging data analytics in healthcare fraud prevention, companies can proactively detect suspicious activities, identify anomalies, and take corrective measures before regulatory authorities intervene. Data analytics solutions like Open Payments Analytics enable pharma companies to track compliance challenges in life sciences and prevent fraudulent activities by offering transparency in transactions.
Healthcare compliance regulations are evolving, and staying ahead of them requires continuous monitoring and reporting. The scheme to defraud a health care benefit program can be identified through advanced analytics, reducing risks associated with non-compliance. The impact of penalties on healthcare compliance is significant, and organizations must take preventive steps to ensure they do not exploit government health care programs unintentionally.
How to Prevent Healthcare Fraud
Pharma companies must adopt proactive measures to prevent fraudulent claims and ensure compliance with healthcare fraud laws. This includes:
- Conducting regular audits to detect anomalies in financial transactions.
- Implementing robust compliance programs to ensure adherence to healthcare compliance regulations.
- Using data analytics to identify and address potential fraud risks.
- Training employees on laws against healthcare fraud, including the federal anti-kickback statute and the consequences of fraud.
- Engaging with Medicaid Fraud Control Units to stay informed about the latest regulatory requirements.
By taking these steps, pharma companies can mitigate the risk of penalties for violating the Federal False Claims Act and maintain compliance with Medicare fraud laws.
Final Thoughts
Rising healthcare fraud penalties highlight the importance of accurate data management in the life sciences industry. Compliance with regulatory requirements, including the anti-kickback statute and the False Claims Act penalties, is critical for avoiding legal consequences. The role of data in preventing healthcare fraud cannot be understated, and leveraging healthcare data compliance solutions like Open Payments Analytics can help organizations stay compliant and protect their reputation.
Understanding compliance laws in life sciences, staying informed about healthcare fraud investigation trends, and implementing fraud prevention strategies can help organizations navigate the complex regulatory landscape. As penalties continue to rise, life sciences companies must prioritize compliance to avoid costly legal repercussions and maintain trust within the industry.
