Fraud, Waste, and Abuse Violations: Civil, Criminal, and Administrative Penalties

Fraud, waste, and abuse (FWA) in healthcare triggers a layered response: civil remedies, criminal sanctions, and administrative actions. Understanding how each framework operates—Civil Monetary Penalties Law CMPL, Program Fraud Civil Remedies Act PFCRA, False Claims Act FCA, the Anti-Kickback Statute AKS, and the Health Care Fraud Statute—helps you gauge risk, plan compliance, and respond effectively if issues arise.

This guide explains what conduct each law reaches, how penalties are calculated, when Exclusion from Federal Health Programs can occur, and practical steps to limit exposure, including strategies that can reduce penalties and demonstrate good-faith compliance.

Civil Monetary Penalties Law Penalties

What the CMPL covers

The Civil Monetary Penalties Law CMPL empowers the HHS Office of Inspector General (OIG) to impose civil penalties for a broad range of misconduct. Covered conduct includes submitting or causing the submission of false or improper claims, offering or transferring remuneration to Medicare/Medicaid beneficiaries to influence care choices, employing or contracting with excluded individuals, violating certain Medicare Advantage/Part D requirements, EMTALA violations, and remuneration tied to the Anti-Kickback Statute AKS.

How penalties are structured

CMPL remedies include per-violation monetary penalties that are adjusted annually for inflation, plus assessments—often up to three times the amount claimed or the remuneration involved. The OIG may also impose Exclusion from Federal Health Programs and require repayment of improper amounts. Violations related to AKS can draw both CMPs and assessments, even where no separate criminal conviction occurs.

Practical implications

• Each line item or claim error can be a separate violation, multiplying exposure.
• Settlements commonly pair penalties with corrective action plans or a corporate integrity agreement when systemic issues exist.
• Screening for excluded individuals, rigorous claim edits, and controls around beneficiary inducements are critical CMPL risk controls.

Program Fraud Civil Remedies Act Penalties

Where PFCRA fits

The Program Fraud Civil Remedies Act PFCRA gives agencies an administrative path to address false, fictitious, or fraudulent claims and statements. It is often used for lower-dollar, factually straightforward cases where a swift administrative remedy is appropriate.

Penalty mechanics and process

PFCRA allows an agency to seek a per-claim civil penalty plus an assessment—commonly up to double the improperly claimed amount—through an administrative hearing before an ALJ. The process includes notice, an opportunity to respond, and appeal rights. Because it is administrative, timelines can be faster than full-blown civil litigation.

Why providers should care

PFCRA can be deployed where an FCA case may be disproportionate. It still carries meaningful financial exposure and reputational risk. Strong documentation, prompt overpayment refunds, and early engagement with the agency can limit liability and facilitate resolution.

False Claims Act Penalties

What triggers FCA liability

The False Claims Act FCA imposes liability for knowingly submitting, or causing the submission of, false claims to the government; making false records material to payment; or knowingly retaining identified overpayments (reverse false claims). “Knowingly” includes actual knowledge, deliberate ignorance, or reckless disregard of the truth, emphasizing your duty to inquire when red flags arise.

Damages, penalties, and other consequences

FCA remedies center on Treble Damages—three times the government’s proven loss—plus a per-claim statutory penalty that is inflation-adjusted. Courts may reduce multipliers for timely self-disclosure and cooperation. FCA liability can also prompt Exclusion from Federal Health Programs, corporate integrity agreements, and obligations to implement corrective actions.

Qui tam and cooperation credit

Private whistleblowers (relators) may file qui tam suits on the government’s behalf, increasing investigative scrutiny. Timely self-disclosure, preservation of evidence, remediation, and restitution can yield cooperation credit that meaningfully influences outcomes in negotiated resolutions.

Anti-Kickback Statute Penalties

Prohibited remuneration

The Anti-Kickback Statute AKS is a criminal law prohibiting knowingly and willfully offering, paying, soliciting, or receiving anything of value to induce or reward referrals for items or services reimbursable by federal healthcare programs. Regulatory safe harbors protect narrowly structured arrangements, but anything outside a safe harbor must be carefully assessed for risk.

Criminal sanctions

AKS violations can result in criminal fines and imprisonment of up to 10 years per offense. Prosecutors may also pursue forfeiture and restitution, particularly where kickbacks fueled large billing volumes. Conspiracy and related charges can compound exposure.

Civil and administrative fallout

Beyond criminal liability, AKS-related conduct may trigger CMPL penalties and assessments, render claims “false” under the FCA, and lead to Exclusion from Federal Health Programs. Practical controls include rigorous review of financial relationships, adherence to written agreements that reflect fair market value, and pre-deal compliance review.

Health Care Fraud Statute Penalties

Scope and intent

The Health Care Fraud Statute makes it a crime to knowingly and willfully execute, or attempt to execute, a scheme to defraud any health care benefit program or to obtain money or property by false or fraudulent pretenses. It applies broadly to public and private payors and often appears alongside conspiracy charges.

Penalty tiers and enhancements

Convictions carry criminal fines and imprisonment of up to 10 years, enhanced to up to 20 years if the offense results in serious bodily injury, and up to life if it results in death. Courts may also impose criminal forfeiture tied to proceeds of the offense, alongside restitution to victims.

Operational takeaways

Because the statute reaches schemes beyond individual claims, pattern detection—data analytics on billing, utilization, and ordering behavior—is essential. Education on documentation integrity and medical necessity helps prevent conduct that could be construed as a fraudulent scheme.

Administrative Actions and Exclusions

Mandatory vs. permissive exclusion

OIG must impose mandatory exclusion for certain convictions (e.g., program-related crimes, patient abuse or neglect), while permissive exclusion may apply to a range of conduct (e.g., license revocations, certain misdemeanors, or kickback-related violations). Exclusion from Federal Health Programs bars reimbursement for items and services furnished, ordered, or prescribed by the excluded individual or entity.

Other administrative remedies

Agencies can suspend payments, place providers on prepayment or postpayment review, revoke or deny Medicare enrollment, and seek recoupment of overpayments. Many resolutions require a corporate integrity agreement that mandates independent review, reporting, training, and board-level oversight.

Collateral consequences

Exclusion and related actions can trigger credentialing consequences, network termination, reportability to data banks, and cross-entity contract reviews. Screening workforce and contractors, plus robust enrollment management, reduces administrative risk.

Penalty Enforcement and Compliance Strategies

How enforcement unfolds

FWA enforcement is often multi-agency, combining DOJ civil and criminal tools, HHS OIG administrative authority, and CMS enrollment actions. Investigations may use subpoenas, civil investigative demands, data analytics, and interviews; parallel proceedings allow civil, criminal, and administrative paths to move in concert.

Core compliance program elements

• Governance: empowered compliance officer, board oversight, and clear reporting lines.
• Written standards: code of conduct, policies for billing, documentation, and financial arrangements.
• Training and communication: role-based AKS/FCA education and refresher training tied to risk.
• Risk assessment and auditing: targeted reviews of high-risk claims, modifiers, incident-to, and medical necessity.
• Third-party oversight: diligence on vendors, referral sources, and contractors; remuneration tracking.
• Hotline and nonretaliation: encourage reporting; promptly triage and investigate allegations.
• Corrective action: root-cause remediation, monitoring, and verification of sustained fixes.

Responding to potential violations

• Stop the problematic conduct, preserve records, and segregate involved staff if needed.
• Conduct a privileged investigation; quantify exposure, including potential Treble Damages under the FCA.
• Refund identified overpayments promptly; strengthen controls to prevent recurrence.
• Evaluate self-disclosure to OIG for CMPL/AKS issues; timely cooperation can mitigate penalties and exclusion risk.
• Document remediation and training to demonstrate a mature compliance posture.

Key takeaways

CMPL and PFCRA provide swift administrative remedies; the FCA adds heavy civil exposure with Treble Damages; the AKS and Health Care Fraud Statute bring criminal risk. Exclusion from Federal Health Programs can be as disruptive as any fine. Proactive compliance, early issue spotting, and credible remediation markedly improve outcomes.

FAQs.

What are the civil penalties for healthcare fraud violations?

Civil exposure commonly includes per-violation penalties (indexed for inflation) and multipliers on the government’s loss. Under the CMPL, OIG may impose penalties plus assessments—often up to three times the amount claimed or remuneration—and seek Exclusion from Federal Health Programs. Under the FCA, the government can recover Treble Damages plus a per-claim statutory penalty, with potential reductions for timely self-disclosure and cooperation.

What criminal sanctions apply under the Anti-Kickback Statute?

The Anti-Kickback Statute AKS is a felony. Convictions can carry substantial fines and up to 10 years’ imprisonment per count, along with restitution and possible forfeiture. AKS violations also create collateral exposure to CMPL penalties, FCA liability for claims tainted by kickbacks, and exclusion.

How are penalties for false claims calculated?

In an FCA case, damages start with the government’s actual loss (for example, amounts paid for noncompliant claims), then are multiplied up to Treble Damages. A separate per-claim civil penalty—adjusted annually for inflation—also applies. Courts may consider cooperation, remediation, and self-disclosure in determining the final result.

What administrative actions can result from fraud, waste, and abuse violations?

Administrative consequences include Exclusion from Federal Health Programs (mandatory or permissive), payment suspensions, prepayment or postpayment review, recoupment, and revocation or denial of Medicare enrollment. Many settlements require corporate integrity agreements with ongoing auditing, reporting, and training obligations.