Deterrence Effects of Antifraud and Abuse Enforcement in Health Care

32 Pages Posted: 7 Oct 2020

See all articles by David H. Howard

David H. Howard

Emory University - Department of Health Policy and Management

Ian McCarthy

Emory University - Department of Economics

Date Written: October 2020

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 unnecessary 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.

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Suggested Citation

Howard, David H. and McCarthy, Ian, Deterrence Effects of Antifraud and Abuse Enforcement in Health Care (October 2020). NBER Working Paper No. w27900, Available at SSRN: https://ssrn.com/abstract=3705111

David H. Howard (Contact Author)

Emory University - Department of Health Policy and Management ( email )

1518 Clifton Road NE
Atlanta, GA 30322
United States

Ian McCarthy

Emory University - Department of Economics ( email )

201 Dowman Drive
Atlanta, GA 30322
United States

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