Brad M. Beall


Hospitals and physicians have begun encouraging their high-cost patients to switch from Medicare or Medicaid to government-subsidized Qualified Health Plans by offering to pay their insurance premiums. Providers make these third-party payments because insurance payouts are much higher under Qualified Health Plans than under Medicare or Medicaid. However, this practice is not always in the best interests of patients, issuers, and the health-care Marketplace. This Note delineates the regulatory responses to this issue, as well as the various advantages and disadvantages that stem from the practice in different contexts. This Note argues that a federal criminal statute is needed to eliminate the harmful effects of third-party payments and preserve the positive effects they can have in certain contexts. Finally, this Note proposes a model federal criminal statute that can serve as a mechanism to combat improper uses of third-party payments. In brief, this Note argues that the harms caused by third-party payments are too significant to be ignored and urges that a narrow federal criminal statute is the best way to address the third-party-payment problem.