RT Journal
A1 Sage WM
T1 FRaud and abuse law
JF JAMA
JO JAMA
YR 1999
FD September 22
VO 282
IS 12
SP 1179
OP 1181
DO 10.1001/jama.282.12.1179
UL http://dx.doi.org/10.1001/jama.282.12.1179
AB 
The story of fraud and abuse law is a tale of path dependence. The enactment
of Medicare and Medicaid legislation 35 years ago was hailed as a step toward
completing the New Deal and creating the Great Society. Indeed, these programs
have proved a tremendous boon to the nation's elderly and indigent; to health
facilities, suppliers, and professionals; and to innovation in medical science.
Yet any sizable government program inevitably creates incentives for overspending.
In 1964, however, achieving political consensus required replicating within
Medicare the unthreatening, familiar landscape of private indemnity insurance:
separate hospital and professional components; private contractors as fiscal
intermediaries and carriers; payment based on usual and customary fees; and
a pledge of noninterference with physician decision making. These constituted
the medical profession's price, which President Lyndon Johnson was happy to
pay. "Five hundred million [dollars]," he reportedly exclaimed when told the
supposed cost of these concessions, "Is that all? Do it. Move that damn bill
out now before we lose it."2 Absent, unfortunately,
was the private marketplace's sensitivity to premium increases.