Isaac Buck

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U.C. Davis Law Review


The Department of Justice’s (“DOJ”) current theory of overtreatment regulation — and, in fact, all of the prominent amount of medical necessity-based health care fraud enforcement — adopts the argument that providers are violating the False Claims Act when they submit bills to the federal government for care they administered that is not medically necessary. Besides stoking the ire of the provider community, this regulatory strategy is susceptible to inefficiency, imprecision, and — as I have argued before — overuse. Whether a procedure was medically necessary can be a highly difficult question to answer, one easily swayed by clinically-complex details, and one made murkier by clinical and geographic variation, Medicare’s often outdated and/or inaccurate coverage determinations, and overtreatment’s settlement-based regulatory regime that features few trials. This strategy can stifle innovation and arrest the natural evolution of the standard of care.

Given these difficulties, and aware of the imminent cost challenges facing the Medicare program, this Article presents a proposal that seeks to improve the efficiency and intellectual honesty of overtreatment regulation by advocating for an explicit shift in the focus of enforcement from medical necessity to excess utilization. Instead of targeting providers and hospitals for a contravention of Medicare’s medical necessity determination during a particular episode of care, this proposal submits that the DOJ would be better served to pursue providers who, over the course of a year, provide “too much” care when compared to similarly-situated peer providers. Using peer providers’ clinical behaviors as a comparative legal standard would clarify the harm that overtreatment regulation seeks to prevent, and relying on an accumulation of data would ensure that those who are pursued by the DOJ are those who are the most responsible for America’s overtreatment problem.

Besides freeing the DOJ’s attorneys from the thorny arguments that characterize medical necessity-based fraud cases, repositioning clinical expertise with providers, and deemphasizing Medicare’s unpredictable coverage determinations, this shift would allow the DOJ to take advantage of the regulatory bonus of “cascaded retreat,” where providers self-adjust their behavior to avoid investigation. Further, building on previous works, this construct would ensure the enforcement mechanism would avoid those comparatively innocuous cases in which innovators minimally diverge from a bureaucratic reimbursement or coverage standard. Most importantly, it would seek to finally provide a powerful incentive to American providers to “do less” without robbing doctors of their highly-valued autonomy or harming Medicare’s respectable quality of care. This would provide a long-awaited counterbalance to the considerable incentives that encourage providers to constantly provide more care in a time of fiscal cliffs and budget crises.

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