IDEAS home Printed from https://ideas.repec.org/a/tpr/amjhec/v5y2019i4p481-508.html
   My bibliography  Save this article

Should We Do More to Police Medicaid Fraud? Evidence on the Intended and Unintended Consequences of Expanded Enforcement

Author

Listed:
  • Victoria Perez

    (The O'Neill School of Public and Environmental Affairs, Indiana University)

  • Coady Wing

    (The O'Neill School of Public and Environmental Affairs, Indiana University)

Abstract

Medicaid Fraud Control Units (MFCUs) are state agencies that investigate and prosecute health care provider fraud, using billing data to decide who to investigate. In particular, providers that submit a large number of claims for a set of fraud prone services are more likely to be investigated. We study the effect of within-state changes in MFCU spending on enforcement outcomes and hospital treatment intensity for fraud prone health conditions in the Medicaid population. We find that increases in MFCU spending substantially increase fraud enforcement actions (investigations, convictions, recoveries). In contrast, MFCU spending increases do not generate substantial changes in treatment intensity for fraud prone health conditions. We find no evidence that MFCUs with expanded budgets investigate less severe cases on the margin.

Suggested Citation

  • Victoria Perez & Coady Wing, 2019. "Should We Do More to Police Medicaid Fraud? Evidence on the Intended and Unintended Consequences of Expanded Enforcement," American Journal of Health Economics, MIT Press, vol. 5(4), pages 481-508, Fall.
    • Handle: RePEc:tpr:amjhec:v:5:y:2019:i:4:p:481-508
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdf/10.1162/ajhe_a_00130
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Meyer, Bruce D & Viscusi, W Kip & Durbin, David L, 1995. "Workers' Compensation and Injury Duration: Evidence from a Natural Experiment," American Economic Review, American Economic Association, vol. 85(3), pages 322-340, June.
    2. Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc.
    3. Richard A. Derrig & Daniel J. Johnston & Elizabeth A. Sprinkel, 2006. "Auto Insurance Fraud: Measurements and Efforts to Combat It," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 9(2), pages 109-130, September.
    4. Daniel Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 353-390.
    5. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    6. Hanming Fang & Qing Gong, 2017. "Detecting Potential Overbilling in Medicare Reimbursement via Hours Worked," American Economic Review, American Economic Association, vol. 107(2), pages 562-591, February.
    7. Paik, Myungho & Black, Bernard & Hyman, David A., 2017. "Damage caps and defensive medicine, revisited," Journal of Health Economics, Elsevier, vol. 51(C), pages 84-97.
    8. Sloan, Frank A. & Shadle, John H., 2009. "Is there empirical evidence for "Defensive Medicine"? A reassessment," Journal of Health Economics, Elsevier, vol. 28(2), pages 481-491, March.
    9. Silverman, Elaine & Skinner, Jonathan, 2004. "Medicare upcoding and hospital ownership," Journal of Health Economics, Elsevier, vol. 23(2), pages 369-389, March.
    10. Crocker, Keith J & Tennyson, Sharon, 2002. "Insurance Fraud and Optimal Claims Settlement Strategies," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 469-507, October.
    11. Bruce D. Meyer & Wallace K. C. Mok, 2014. "A Short Review of Recent Evidence on the Disincentive Effects of Unemployment Insurance and New Evidence From New York State," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(1), pages 219-252, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Victoria Perez & Julio A. Ramos Pastrana, 2023. "Finding fraud: enforcement, detection, and recoveries after the ACA," International Journal of Health Economics and Management, Springer, vol. 23(3), pages 393-409, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xin Zhao & Xiaoxue Li & Benno Torgler & Uwe Dulleck, 2021. "Patient violence, physicians treatment decisions, and patient welfare: Evidence from China," Health Economics, John Wiley & Sons, Ltd., vol. 30(6), pages 1461-1479, June.
    2. Zabinski, Zenon & Black, Bernard S., 2022. "The deterrent effect of tort law: Evidence from medical malpractice reform," Journal of Health Economics, Elsevier, vol. 84(C).
    3. Andrew I. Friedson, 2017. "Medical Malpractice Damage Caps and Provider Reimbursement," Health Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 118-135, January.
    4. Bernard S. Black & Amy R. Wagner & Zenon Zabinski, 2017. "The Association between Patient Safety Indicators and Medical Malpractice Risk: Evidence from Florida and Texas," American Journal of Health Economics, MIT Press, vol. 3(2), pages 109-139, Spring.
    5. Michael D. Frakes & Jonathan Gruber, 2018. "Defensive Medicine: Evidence from Military Immunity," NBER Working Papers 24846, National Bureau of Economic Research, Inc.
    6. Arab Naz & Umar Daraz & Waseem Khan & Qaisar Khan & Tariq Khan & Anwar Alam & Irum Mughal, 2013. "Human’s Complexity and Man’s Atrocity: Causes Of Medical Malpractices among Pakhtuns of Pakistan," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(3), pages 286-297, March.
    7. Christopher Carpenter & Sebastian Tello-Trillo, 2015. "Do 'Cheeseburger Bills' Work? Effects of Tort Reform for Fast Food," Journal of Law and Economics, University of Chicago Press, vol. 58(4).
    8. Morita, Hatsuru, 2018. "Criminal prosecution and physician supply," International Review of Law and Economics, Elsevier, vol. 55(C), pages 1-11.
    9. Daniel P. Kessler, 2011. "Evaluating the Medical Malpractice System and Options for Reform," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 93-110, Spring.
    10. Chopard, Bertrand & Musy, Olivier, 2023. "Market for artificial intelligence in health care and compensation for medical errors," International Review of Law and Economics, Elsevier, vol. 75(C).
    11. Congressional Budget Office, 2010. "Selected CBO Publications Related to Health Care Legislation, 2009-2010," Reports 21993, Congressional Budget Office.
    12. Angelo Antoci & Alessandro Fiori Maccioni & Paolo Russu, 2018. "Medical practice and malpractice litigation in an evolutionary context," Journal of Evolutionary Economics, Springer, vol. 28(4), pages 915-928, September.
    13. Paola Bertoli & Veronica Grembi, 2018. "Medical Malpractice: How Legal Liability Affects Medical Decisions," Contributions to Economic Analysis, in: Health Econometrics, volume 127, pages 235-261, Emerald Group Publishing Limited.
    14. Patricia H. Born & J. Bradley Karl, 2016. "The Effect of Tort Reform on Medical Malpractice Insurance Market Trends," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 13(4), pages 718-755, December.
    15. Paul Heaton, 2017. "How Does Tort Law Affect Consumer Auto Insurance Costs?," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 84(2), pages 691-715, June.
    16. Vandersteegen, Tom & Marneffe, Wim & Cleemput, Irina & Vereeck, Lode, 2015. "The impact of no-fault compensation on health care expenditures: An empirical study of OECD countries," Health Policy, Elsevier, vol. 119(3), pages 367-374.
    17. Frakes, Michael & Jena, Anupam B., 2016. "Does medical malpractice law improve health care quality?," Journal of Public Economics, Elsevier, vol. 143(C), pages 142-158.
    18. Avraham, Ronen & Schanzenbach, Max, 2015. "The impact of tort reform on intensity of treatment: Evidence from heart patients," Journal of Health Economics, Elsevier, vol. 39(C), pages 273-288.
    19. Matter, Ulrich & Stutzer, Alois, 2015. "Politico-economic determinants of tort reforms in medical malpractice," Working papers 2015/02, Faculty of Business and Economics - University of Basel.
    20. Congressional Budget Office, 2010. "Selected CBO Publications Related to Health Care Legislation, 2009-2010," Reports 21993, Congressional Budget Office.

    More about this item

    Keywords

    Medicaid; fraud; hospital; physicians; Medicare; insurance;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K0 - Law and Economics - - General
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
    • L5 - Industrial Organization - - Regulation and Industrial Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:amjhec:v:5:y:2019:i:4:p:481-508. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.