Regulating physician investment and referral behavior in the competitive health care marketplace of the '90s--an argument for decentralization.

Abstract

Congress regulates the investment and referral practices of physicians through the federal Anti-Fraud and Abuse statute. The Anti-Fraud and Abuse statute, however, limits the ability of physicians to adapt their investment and referral practices to an increasingly competitive health care industry. In order to restrict fraudulent practices without restricting competition, the authority to regulate physician investment and referral practices should be returned to the states, who can recognize and exempt beneficial competitive practices from the reach of the applicable state statutes.