Legal implications of managed care arrangements

Prior to the 1980s, managed care was virtually nonexistent as a force in health care. Presently, 64 percent of employees in America are covered by managed care plans, including health maintenance organizations (20 percent) and preferred provider organizations (44 percent). In contrast, only 29 percent of employees were enrolled in managed care plans in 1988 and only 47 percent in 1991. To date, the primary reason for this incredible growth in managed care has been economic-market pressure to reduce health care costs. For the foreseeable future, political pressures are likely to fuel this growth, as managed care is at the center of President Clinton's national health care plan. Although there are numerous legal issues surrounding managed care, this article focuses primarily on antitrust implications when forming managed care entities. In addition, the corporate practice of medicine doctrine, certain tax issues, and the fraud and abuse laws are discussed.