Deterrence effects of antifraud and abuse enforcement in health care

David H. Howard and Ian McCarthy

Journal of Health Economics, 2021, vol. 75, issue C

Abstract: Estimates of the benefits of antifraud enforcement in health care typically focus on direct monetary damages. Deterrence effects are acknowledged but unquantified. We evaluate the impact of a Department of Justice investigation of hospitals accused of billing Medicare for unnecessary implantable cardiac defibrillator (ICD) procedures on their use. Using 100 % inpatient and outpatient procedure data from Florida, we estimate that the investigation caused a 22 % decline in ICD implantations. The present value of savings nationally over a 10 year period is $2.7 billion, nearly 10 times larger than the $280 million in settlements the Department of Justice recovered from hospitals. The investigation had a large and long-lasting effect on physician behavior, indicating the utility of antifraud enforcement as a tool for reducing wasteful medical care.

Keywords: Medicare; False Claims Act; Fraud; Physicians’ financial incentives; Deterrence; Medical overuse; Physician behavior; Supplier induced demand (search for similar items in EconPapers)
JEL-codes: I18 K42 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Deterrence Effects of Antifraud and Abuse Enforcement in Health Care (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:75:y:2021:i:c:s0167629620310511

DOI: 10.1016/j.jhealeco.2020.102405

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