Mixed Verdict for Antitrust and Anti-Fraud Laws Governing Health Care Providers and Organizations

Study of laws affecting the organization and management of health services

Starting in April 1994, legal scholars at the Vanderbilt University School of Law, Nashville, Tenn., reviewed the effects of existing laws on the ability of health care managers to control costs and the quality of medical services delivered under new market-driven health care systems.

Key Findings

Among the principal investigator's conclusions:

  • Hospital cooperation laws, which were enacted by many states to protect hospitals from antitrust charges, are potentially inefficient because they rely on state monitoring instead of the market to hold down costs.
  • The anti-kickback (see Appendix 2 for definition) provisions of the federal fraud and abuse laws rendered many common and beneficial patient referral and payment arrangements technically illegal.
  • Antitrust laws applied to health care providers promote service and efficiency as intended, but in some cases, the law as applied to the health care industry continues to support the traditional, provider-driven model.

The principal investigator published the results of his review in a number of legal and health policy journals, including the Cornell Law Review and Health Affairs.

Funding

The Robert Wood Johnson Foundation (RWJF) supported the project with a grant of $184,916, which took place between April 1994 and December 1999.