Enforcement Overdose: Health Care Fraud Regulation in an Era of Overcriminalization and Overtreatment

Abstract

In an effort to address the growing problem of “overtreatment” in American health care, the federal government has turned to its 150-year-old statute, the civil False Claims Act (FCA) to prosecute providers who do too much. Lacking many of the traditional hallmarks of conventional health care fraud scenarios, this new enforcement framework features cases in which the government alleges that a provider is administering health care that is inefficient, too costly, or unnecessary. As I have argued before, in addition to ensnaring “innocent” providers, this regulatory regime allows the federal government to both (1) freeze practice standards by arresting their natural evolution, and (2) unilaterally limit care by engaging in what can be called “backdoor rationing.” In addition to largely shutting out the medical community during these “anti-fraud” initiatives, this practice’s failures are compounded by the fact that the real causes of overtreatment — deep, structural challenges — are left largely unaddressed by the government’s investigations.

This Article builds upon my previous scholarship by firmly situating the regulation of overtreatment within the robust scholarship of enforcement literature. After examining overcriminalization and overenforcement, this analysis argues that unique factors characterizing the enforcement of overtreatment — the existence of a widely-applicable and powerful statute in the FCA, political pressure and financial reward to increase the number of health care fraud investigations, and comparatively-easy resolution of allegations that result in lucrative settlement without litigation — put the enforcement framework at risk for overuse. And like other regimes susceptible to overenforcement or overcriminalization, the regulation of overtreatment is highly reliant on prosecutorial discretion in determining both the targets of, and penalties for, alleged overtreatment violations.

A framework susceptible to disorder ensues. Such a regime risks provider buy-in, resulting in increased tension between the medical profession and the prosecutors tasked with regulating it. Most starkly, whether the enforcement framework actually nets the “worst” actors or not remains an unanswered question. By identifying the FCA’s enforcement mechanisms most susceptible to overuse, this piece seeks to recalibrate the federal government’s chosen strategy to regulate health care fraud, injecting much-needed consistency to improve what scholars have called the chaotic, unfair, and disordered framework that currently characterizes health care fraud enforcement.

Keywords: health care fraud and abuse, False Claims Act, rationing, medical appropriateness, health care enforcement, health care finance