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30 J. Legal Stud. 531 (2001)
Health Care Fraud and Abuse: Market Change, Social Norms, and the Trust Reposed in the Workmen

handle is hein.journals/legstud30 and id is 539 raw text is: HEALTH CARE FRAUD AND ABUSE: MARKET
Health care fraud and abuse reportedly account for 10 percent of total spending
on health care, or about $120 billion per year. Not surprisingly, Congress has granted
fraud control personnel sweeping powers with which to attack the problem. Unfor-
tunately, effectively addressing health care fraud is exceedingly complicated, partic-
ularly in light of recent major changes in the medical marketplace and the social
context of such conduct. Broadly speaking, physicians view such conduct as essential
to ensure high-quality care; program administrators view it as the price of the program;
fraud control personnel view it as criminal misconduct; and the public's view depends
greatly on who is benefitting. Social norms regarding health care fraud vary among
these groups as well. The article examines the practical and theoretical challenges
associated with attacking health care fraud and the merits of the current fraud control
regime in light of these considerations.
The wages of labour vary accordingly to the small or great trust
which must be reposed in the workmen. . . . We trust our health
to the physician. . . . Such confidence could not safely be re-
posed in people of a very mean or low condition. Their reward
must be such, therefore, as may give them that rank in the society
which so important a trust requires. [ADAM SMITH, The Wealth
of Nations (1991)]
NOTWITHSTANDING Adam Smith's confidence in the integrity of physi-
cians, health care fraud and abuse control is a booming industry. As Table
1 reflects, there has been a steady upward trend over the past 6 years in civil,
* Professor, University of Maryland School of Law. I appreciate the care with which Roger
Feldman and Arti Rai prepared their responses to this article. Helpful comments were also
provided by Peter Jacobson, Tim Jost, Dan Kahan, Bill Kovacic, Joan Krause, Leandra Led-
erman, Dick Pierce, Sara Rosenbaum, Sonia Suter, Bruce Vladeck, and Peter Winn. Tim Jost
and Sharon Davies graciously provided a prepublication manuscript of their book, Medicare
and Medicaid Fraud and Abuse. I am also grateful to the current and former employees of
the Department of Health and Human Services, private insurers, and various providers who
provided their perspective on these issues.
[Journal of Legal Studies, vol. XXX (June 2001)]
V 2001 by The University of Chicago. All rights reserved. 0047-2530/2001/3002-0011$01.50

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