On May 2, 2016, the Railroad Retirement Board (Board) published an interim final rule in the Federal Register amending its regulations to increase the minimum and maximum civil monetary penalty amounts under the Board’s jurisdiction to account for inflation. This marks the first update to the Board’s False Claims Act (FCA) penalties since 1986 (prior adjustments made in 1996 were disregarded).  Under the rule, minimum per-claim penalties would increase from $5,500 to $10,781 and maximum per-claim penalties would increase from $11,000 to $21,563.

The amendment is a result of Section 701 of the Bipartisan Budget Act of 2015, entitled the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which required the Board and other agencies, including the Department of Justice, to publish rules by July 1 of this year with an effective date by August 1, 2016.  Although each agency will separately publish amended penalties that have been adjusted for inflation, the various agency increases are expected to mirror the Board’s adjustments.  These updates may generate stakeholder pushback arguing that the changes will result in unconstitutionally excessive fines, especially as it relates to potential FCA cases in the healthcare arena, where per-claim penalties for healthcare-related cases can be voluminous. 

The Board’s rule becomes effective August 1, 2016, and comments must be received on or before July 1, 2016.  The rule is available here.

Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.