Federal Agencies Can Now Directly Pursue FCA Cases Up to $1M
Embedded in the FY 2025 National Defense Authorization Act, signed into law on December 23, 2024, is a provision that could significantly impact agency enforcement activity: the Administrative False Claims Act (“AFCA”). Enforcement of the federal FCA is currently limited to DOJ and whistleblowers, and agencies lack the right to pursue federal FCA claims directly on their own behalf. But effective after agencies amend their regulations—the AFCA directs them to do by June 23, 2025, although the change in administration may cause delays—each federal agency’s Inspector General can pursue administrative FCA actions for claims aggregating up to single damages of $1,000,000, which are also subject to doubling under the statute (rather than treble damages as under the federal FCA). In addition, agencies can levy civil monetary penalties, subject to yearly inflationary increases. The amount of each per-claim penalty varies by agency but, for example, HHS may impose a penalty of up to $12,800 per claim, in addition to double damages. The AFCA may increase agency appetites to convert administrative self-disclosures, such as those made to HHS-OIG relating to potential violations of the Anti-Kickback Statute, into AFCA actions.
Massachusetts Law Imposes FCA Liability on Healthcare Investors For Failures to Disclose
Massachusetts recently signed into law House Bill 5159, which includes a strict new rule for investors in Massachusetts health care companies, requiring them to timely disclose FCA violations of their investment entities or face FCA liability themselves. This law imposes FCA liability for a broader range of conduct by investors as compared to the federal False Claims Act, and affected investors should consider whether any operational changes should be made to address the new law.
CBO Reports on Grassley Bill That Would Modify Escobar Materiality and Impose Rational Relation Test on Granston Dismissals
On July 15, 2022, the Congressional Budget Office (CBO) issued a cost estimate concerning the False Claims Amendments Act of 2021, a bill sponsored by Senator Grassley. The bill would alter the False Claims Act in three important ways. (more…)
DOJ Announces Increased Inflation-Adjusted False Claims Act Penalties
The 2015 Balanced Budget Act (BBA) requires that federal agencies make inflationary adjustments to civil monetary penalties on a yearly basis to account for inflation using calculations based on the Bureau of Labor Statistics’ Consumer Price Index. In recent years, these increases have occurred less frequently. But on December 13, 2021 the Department of Justice published a final rule that increases the civil penalties in False Claims Act actions for violations that that occurred after November 2, 2015, the date the BBA was enacted. (more…)
