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Detecting Medicare Abuse

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  • David Becker
  • Daniel Kessler
  • Mark McClellan
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    Abstract

    This paper identifies which types of patients and hospitals have abusive Medicare billings that are responsive to law enforcement. For a 20 percent random sample of elderly Medicare beneficiaries hospitalized from 1994-98 with one or more of six illnesses that are prone to abuse, we obtain longitudinal claims data linked with Social Security death records, hospital characteristics, and state/year-level anti-fraud enforcement efforts. We show that increased enforcement leads certain types of types of patients and hospitals to have lower billings, without adverse consequences for patients' health outcomes.

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    File URL: http://www.nber.org/papers/w10677.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10677.

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    Date of creation: Aug 2004
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    Publication status: published as Becker, David, Daniel Kessler and Mark McClellan. "Detecting Medicare Abuse," Journal of Health Economics, 2005, v24(1,Jan), 189-210.
    Handle: RePEc:nbr:nberwo:10677

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    1. Robert H. Porter & J. Douglas Zona, 1992. "Detection of Bid Rigging in Procurement Auctions," NBER Working Papers 4013, National Bureau of Economic Research, Inc.
    2. Dwayne Banks & Elliott Parker & Jeanne Wendel, 2001. "Strategic interaction among hospitals and nursing facilities: the efficiency effects of payment systems and vertical integration," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 119-134.
    3. Mark Duggan & Steven D. Levitt, 2002. "Winning Isn't Everything: Corruption in Sumo Wrestling," American Economic Review, American Economic Association, vol. 92(5), pages 1594-1605, December.
    4. Eduardo Engel & Alexander Galetovic & Claudio Raddatz, 1999. "A Note on Enforcement Spending and Vat Revenues," Documentos de Trabajo 52, Centro de Economía Aplicada, Universidad de Chile.
    5. Elaine Silverman & Jonathan Skinner, 2001. "Are For-Profit Hospitals Really Different? Medicare Upcoding and Market Structure," NBER Working Papers 8133, National Bureau of Economic Research, Inc.
    6. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June.
    7. Daniel P. Kessler & Mark B. McClellan, 2002. "The Effects of Hospital Ownership on Medical Productivity," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 488-506, Autumn.
    8. Rose-Ackerman, Susan, 1975. "The economics of corruption," Journal of Public Economics, Elsevier, vol. 4(2), pages 187-203, February.
    9. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
    10. Robinson, James C, 1996. "Administered Pricing and Vertical Integration in the Hospital Industry," Journal of Law and Economics, University of Chicago Press, vol. 39(1), pages 357-78, April.
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