Assessing the Impact of The False Claims Act on Healthcare Delivery

The US federal government prosecute most health care fraud and abuse cases under a privatized whistleblowing law called the False Claims Act (FCA). Under the FCA, individuals who have private information about misreporting or overbilling to the Medicare program can sue providers directly in federal civil court. The Department of Justice participates in many successful cases, but whistleblowers can also pursue cases on their own. Since the 1986 enactment of the FCA, the FCA has produced over 7,000 healthcare whistleblower lawsuits, from which the government has recovered more than $32 Billion.
A number of FCA cases have targeted hospices for admitting ineligible patients. Medicare covers hospice for patients with a life expectancy less than 6 months. In 2018, the hospice program served more than 1.5 million Medicare beneficiaries, including more than half of all decedents, spending $19.2 billion. Whistleblowers and the Department of Justice have pursued cases against many for-profit hospice chains for admitting patients who are not terminally ill, including many Alzheimer’s and dementia patients. They charge that administrators pressured clinicians to admit patients and punished or fired those who refused. Long-stay patients may be particularly profitable because they require less ongoing care.
The objectives of our analysis are to 1) estimate differences in admission patterns between defendant hospices and controls and 2) estimate the impact of hospice admission for the marginal patient on life expectancy and Medicare spending. We will identify estimates based on Medicare beneficiaries’ geographical proximity to a defendant hospice and hospices’ proximity to an annual cap on reimbursements, which is determined in-part by random variation in the length of stays of previously admitted patients.