Abstract
This paper analyzes private anti-fraud enforcement under the False Claims Act, which compensates whistleblowers for litigating against healthcare providers who overbill the US government. I conduct several case studies of successful whistleblower lawsuits concerning Medicare fraud, pairing new legal data with large samples of Medicare claims. I estimate that deterrence from $1.9 billion in whistleblower settlements generated Medicare cost savings of nearly $19 billion, while imposing low costs on the government. These results suggest private enforcement is a cost-effective way to combat public expenditure fraud.
Keywords: JEL Codes, H41, K42, I13, D73
1. Introduction
Waste, fraud and abuse are serious concerns in the governmental provision of goods and services. Governments often rely on private firms to execute their spending, such as the procurement of goods or in…
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