Working Paper (September 2017)
Author: Mark W. Pearlstein and Laura McLane
Politicians are often heard decrying fraud and abuse in the health care system, particularly where government payers like Medicare and Medicaid are involved. There is no question that such fraud occurs: indeed, cases involving physicians billing payers for patients they did not see, or for treatments they did not provide, most certainly exist.
Among other remedies, fraud of this kind is often redressed through a Civil War era statute known as the False Claims Act (FCA), which holds government contractors, including health care providers, civilly liable to the United States for treble damages and penalties if they knowingly or recklessly submit false or fraudulent claims to a government payer, such as Medicare or Medicaid. When a provider bills for something that was not done, the FCA provides an appropriate remedy, consistent with the purpose of the statute: to punish and deter receipt of government funds through fraud.