The government recovers money from those who have committed Medicare fraud in criminal cases, through criminal fines and forfeitures; and in civil cases, through civil monetary penalties, civil settlements and judgments. The Office of the Inspector General is authorized to seek different amounts of civil monetary penalties and assessments based on the type of violation.
The Social Security Act is one of the key laws involved in Medicare fraud and penalties. It includes: the Anti-Kickback Statute (it is a felony for anyone to pay, solicit or receive anything of value in return for a referral or reimbursement); the Exclusion Statute (a physician convicted of a criminal offense can be banned from Medicare); the False Claims Act (prohibits submission of false or fraudulent claims for payment); and the (Stark) Physicians Self-Referral Act (prohibits physician self-referrals for services and referrals to friends and family).
Anti-kickback violations are punishable by up to five years in prison, with the potential for additional criminal fines up to $25,000, and administrative civil money penalties up to $50,000. Penalties for violating Stark include denial of payment, refund of payment, imposition of a $15,000 per service civil monetary penalty and imposition of a $100,000 civil monetary penalty for each arrangement considered to be a circumvention scheme.
Under the False Claims Act, those convicted of committing Medicare fraud are liable for three times the government’s damages plus civil penalties of $5,500 to $11,000 per false claim. Several states have their own false claims acts.
The Affordable Care Act (ACA) makes it possible for the government to suspend payment when it is investigating possible fraud until the case is resolved. To separate those committing fraud from those making honest mistakes, the ACA requires physicians to return overpayments within 60 days of discovering a payment error. The ACA also allows physicians to voluntarily self-disclose potential violations, such as kickbacks.
Since 1997, $20.6 billion recovered from people and organizations who committed Medicare fraud has been returned to the Medicare Trust Funds. In 2011 alone, the government recovered $4.1 billion, $2.5 billion of which was returned to the Medicare Trust Funds.
Have Doctors and Other Providers and Suppliers Been Excluded From Medicare Because of Fraud, Abuse or Waste? Is There a List of Those Who Have Been Excluded?
Who's Who in Medicare Fraud? Who Is in Charge? Who Handles the Investigations? Who Prosecutes?
How Much Money Is Lost to Medicare Fraud Annually?
Several Bills Have Been Introduced in Congress Regarding Medicare Fraud. Will Any of Them Become Law?
How Many Medicare Claims Are Processed by the Centers for Medicare & Medicaid Services (CMS) per Day?