HHS Hikes Civil Monetary Penalties



The Health and Human Services Department is adjusting for inflation maximum health-care civil monetary penalties under interim final rules.  

The HHS is required to publish “catch-up adjustments” under Section 4(b) of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 to “improve the effectiveness of civil monetary penalties and to maintain their deterrent effect.” 

Under the law HHS is also required to make annual adjustments to penalties moving forward. 

The rules increased from $100 to $109 the Public Health Service Act penalty for violations related to the Affordable Care Act’s medical loss ratio reporting and rebating.  The final rules amend Section 2718 of the PHSA by removing the phrase “may not exceed $100 for" and adding in its place the phrase "may not exceed $100 as adjusted annually under 45 CFR part 102 for."

Additionally, the HIPAA administrative simplification provision maximum yearly penalty for covered entities was increased from $1,500,000 to $1,650,300.  

Penalty adjustments, which range from 1 percent to 150 percent, became effective on Sept. 6, 2016.

The rules apply to penalties assessed after Aug. 1, 2016, whose associated violations occurred after Nov. 2, 2015.

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