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Trending in Healthcare - March 2017

 

2017 Civil Monetary Penalties Adjustment

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On February 3, 2017, the Department of Health and Human Services (HHS), Office of the Assistant Secretary for Financial Resources, updated its Civil Monetary Penalties (CMP) to reflect the annual inflation increase. The increase is calculated by using the percent increase in the Consumer Price Index for all urban consumers for the month of October in the year in which the CMP was most recently established or modified.

The cost-of-living adjustment multiplier for 2017 is 1.01636, or a 1.6% increase in the penalty amounts versus 2016 penalties. Using this multiplier, HHS has adjusted its monetary penalties in 45 CFR 102.3. The adjusted civil penalty amounts apply to civil penalties assessed on or after February 3, 2017, for violations that occurred after November 2, 2015. If the violation occurred prior to that date, or a penalty was assessed prior to September 6, 2016, the pre-adjustment civil penalty amounts in effect prior to September 6, 2016, will apply.

Along with its final ruling, HHS published a penalty table of increases from 2016 to 2017. Some of the more significant penalties included the following:

  • Penalty for each HIPAA violation due to willful neglect and not corrected during the 30-day period starting when the covered entity first knew of the violation increased from a maximum penalty of $1,650,300 in 2016 to $1,677,299 in 2017 (45 CFR 160.404 (b)(2)(iii)(A)(B)).
  • Penalty for failure of covered individuals to report to the Secretary and one or more law enforcement officials any reasonable suspicion of a crime against a resident of a long-term care facility increased from a maximum penalty of $326,235 in 2016 to $331,572 in 2017 (1320b-25(c)(2)(A)).
  • Penalty for a Medicaid managed care organization that acts to discriminate among enrollees on the basis of their health status went from $147,177 in 2016 to $149,585 in 2017 (1396u-2(e)(2)(A)(ii)).
  • Penalty for a Medicare Advantage organization's or Part D sponsor's early termination of its contract went from $136,689 in 2016 to $138,925 in 2017 (1395w-27(g)(3)(D)).

If you have any questions regarding the 2017 CMP adjustments or the HHS Final Ruling, please contact your Marcum advisor.

SOURCE

Federal Register

 
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