CMS Pub. 100-08, ch. 4, § 4.11.1

In 1981, Congress added §1128A (42 U.S.C. 1320a-7a) to the Social Security Act to

authorize the Secretary of Health and Human Services to impose civil monetary

penalties (CMPs). Since the enactment of the first CMP authority in 1981, Congress has

increased both the number and types of circumstances under which CMPs may be

imposed. Most of the specific statutory provisions authorizing CMPs also permit the

Secretary to impose an assessment in addition to the CMP. An assessment is an

additional monetary payment in lieu of damages sustained by the government because of

the improper claim. Also, for many statutory violations, the Secretary may exclude the

individual or entity violating the statute from participating in Medicare and other federal

health care programs for specified periods of time.

In October 1994, the Secretary realigned the responsibility for enforcing these CMP

authorities between the Centers for Medicare & Medicaid Services and the Office of the

Inspector General. CMS was delegated the responsibility for implementing CMPs that

involve program compliance. The OIG was delegated the responsibility for

implementing CMPs that involve threats to the integrity of the Medicare or Medicaid

programs, i.e., those that involve fraud or false representations. On August 21, 1996, the

Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191) was

enacted. This law provides for higher maximum CMPs ($10,000 per false item or service

on a claim or instance of non-compliance, instead of $2,000 per item or service), and

higher assessments (three times the amount claimed, instead of twice the amount) for

some of the violations.