A Farewell to Falsity: Shifting Standards in Medicare Fraud Enforcement

For the better part of a decade, Americans have had a front-row seat to a fervent and turbulent debate over the future of their health care system. The passage of the Patient Protection and Affordable Care Act of 2010 (ACA), the most comprehensive health reform effort since the mid-1960s, ushered in a new era in health law and policy, granting millions of Americans access to health care. After multiple legal challenges and congressional efforts that ultimately failed to slay the law, the ACA had become entrenched by the end of the Obama administration, even though pieces of the law had failed to work exactly as planned. Now, with the surprising election of President Donald Trump, reenergized Republicans are targeting the law once more, and it suddenly appears more vulnerable than ever. Dynamic uncertainty again permeates the national debate. Although most powerful protections of the ACA may evaporate--no small event, to be sure--the value-based era which it unleashed seems here to stay. Indeed, this era--focused on efficiency, standardization, and quality within American medicine--has just begun to bear fruit. Illustrated prominently by recent changes to Medicare that alter how the program pays its doctors for services they provide to its beneficiaries, America is moving away from the old strictures of fee-for-service medicine. At the same time, traditional legal tools, and particularly the federal government’s most prominent anti-fraud tool, the civil federal False Claims Act (FCA), seem to be facing new limits. This has been recently evident in medical necessity-based fraud cases, and particularly highly publicized fights that have targeted the burgeoning industry of hospice care. This Article tracks this development, ultimately arguing that the move to "reimbursement-based regulation" may be a positive step in finally reining in the worst excesses of American health care. But it also cautions against the deceptive simplicity of allowing medical heterogeneity and clinical complexity to prevent application of America’s most powerful anti-fraud tools to its medical industry. Just because reimbursement policy has shifted to shoulder some of the regulatory burden of overtreatment does not mean that health care fraud--like fee-for-service medicine--should be confined to the past. In the end--and regardless of whatever legislation the national debate surrounding American health care produces--American medicine must adequately address its susceptibility to overtreatment, its incentives toward financial excess and waste, and its inability to push providers and entities into adopting more efficient practices. Medicare is finally moving quickly to bring about effective changes, and the program is seeking clarity in the midst of a period of tremendous uncertainty for American health care.