Ambulance Taxis: The Impact of Regulation and Litigation on Health-Care Fraud

We study the effectiveness of pay-and-chase lawsuits and upfront regulations for combating health care fraud. Between 2003 and 2017, Medicare spent $7.7 billion on 37.5 million regularly scheduled ambulance rides for patients traveling to and from dialysis facilities even though many did not satisfy Medicare's criteria for receiving reimbursements. Using an identification strategy based on the staggered timing of regulations and lawsuits across the US, we find that adding a prior authorization requirement for ambulance reimbursements reduced spending much more than pursuing criminal and civil litigation did on their own. We find no evidence that prior authorization affected patients' health.