GAO Delves Into Pathology Self-Referrals, Concludes Such Practices Drive Up Utilization

The Government Accountability Office (GAO) has expressed alarm about the rising number of self-referred tests from pathologists participating in the Medicare program and has recommended safeguards to curb the practice. The report was generally well-received from the pathology and lab communities, which agree that self-referrals drive up utilization whether or not the care provided is medically necessary. According to the GAO, the volume of self-referred anatomic pathology (AP) services more than doubled between 2004 and 2010, from 5.6 million to 7.8 million, with self-referrals particularly high among providers that switched to self-referrals sometime during that period. The GAO estimated that in 2010, providers engaged in self-referrals made 910,000 more referrals than if their volumes per biopsy were similar to those of their nonreferring counterparts. “Physician self-referral is a national problem,” said College of American Pathologists President-elect Gene Herbek, M.D. “It contributes to widespread abuses, increased medical costs, and overutilization.” Herbek recommended that AP be removed from the in-office ancillary services (IOAS) exception, but he did not support GAO’s recommendation that the Centers for Medicare and Medicaid Services construct a payment mechanism to discourage self-referrals. New legislation introduced in Congress would remove AP services from the IOAS. The American Clinical Laboratory Association also concurred with CAP regarding eliminating the IOAS exception without targeting all laboratories. Takeaway: Self-referrals in anatomic pathology drive up utilization rates, but groups representing pathologists and laboratories would like a more targeted response than that recommended by the GAO.