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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, University of Chicago Press, vol. 5(4), pages 481-508, Fall.
    • Handle: RePEc:ucp:amjhec:v:5:y:2019:i:4:p:481-508
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    File URL: https://www.journals.uchicago.edu/doi/pdf/10.1162/ajhe_a_00130
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    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.
    2. Zhou, Wuping & Xu, Chunchun & Zhang, Lanyue & Fu, Hongqiao & Jian, Weiyan, 2025. "Behaviours and drivers of diagnosis-related group upcoding in China: A mixed-methods study," Social Science & Medicine, Elsevier, vol. 366(C).
    3. Atul Gupta & Ambar La Forgia & Adam Sacarny, 2024. "Turbocharging Profits? Contract Gaming and Revenue Allocation in Healthcare," NBER Working Papers 32564, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

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    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

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