Caring Too Much: Misusing the False Claims Act to Target Overtreatment

Abstract

As the costs of health care administration and delivery continue to grow, health care fraud enforcement actions have increased in number and severity, and, with the recently upheld Patient Protection and Affordable Care Act adding more than $350 million over the next ten years to fight health care fraud, they will likely continue to do so. Continuing a strategy it has used for decades, the federal government is relying mainly on the False Claims Act (FCA), an age-old statute with blunt penalties, to levy remarkable fines against providers in an ever-expanding net of enforcement. But recent examples indicate that the government is applying the FCA to scenarios in which its application seems unwarranted. Namely, the government is now increasingly wielding the FCA against “overtreatment” — defined as cases in which a provider has allegedly provided “too much” care in an inefficient, overly expensive, or unnecessary way — presumably to address the looming fiscal crisis. Exemplified by the Department of Justice’s ongoing implantable cardioverter defibrillator investigation, the federal government is seeking to regulate overtreatment through application of its powerful anti-fraud statute.Even though health care waste and abuse undeniably plague American health care, this Article argues that the government’s solution of applying the FCA against providers who engage in overtreatment is doctrinally unsatisfying and practically destructive. The overreliance on “data mining,” a desire to freeze vague and developing practice standards, and the FCA’s overwhelming penalties that precipitate immediate settlement make up the key components of this overtreatment enforcement model. This results in cascading settlements, allowing the government to unilaterally change developing medical practice standards with little clinical input or judicial review in what can be called “backdoor rationing.” Further, these anti-fraud initiatives often impact the wrong providers and can stifle innovation. This analysis provides an in-depth critique of this new development in health care fraud enforcement in an effort to decouple conventional health care fraud cases from overtreatment investigations. Ideally, this piece will start the conversation toward an improved and more legitimate enforcement framework. At bottom, it illustrates the doctrinal and practical problems that will likely continue to exist at the complex intersection of medical necessity, health care financing, and fraud — even as the administration of America’s health care undergoes radical change.