Government Report Concerning Self-Referral May Impact Labs Differently Than Expected
While physicians find the Government Accountability Office (GAO) study concerning the impact of self-referral of anatomic pathology services on the Medicare program flawed, inaccurate, and offensive, laboratory and pathology groups generally applaud the study, saying it proves what they have been saying for a long time. The study, titled “Action Needed to Address Higher Use […]
While physicians find the Government Accountability Office (GAO) study concerning the impact of self-referral of anatomic pathology services on the Medicare program flawed, inaccurate, and offensive, laboratory and pathology groups generally applaud the study, saying it proves what they have been saying for a long time. The study, titled “Action Needed to Address Higher Use of Anatomic Pathology Services by Providers Who Self-Refer,” provided data and statistics that some say show beyond any doubt that physicians who perform anatomic pathology services in their offices on their own patients order a significantly higher number of these services than providers who do not have labs in their offices. On the other hand, the American Urological Association in a statement said the study is flawed. “The GAO’s assertion that urologists and other specialists are utilizing ancillary services for financial gain is both fundamentally wrong and offensive,” it says. Many laboratory experts expect prohibiting self-referral in this area will automatically cause an increase in their volumes for these tests. That may be true for some labs, but not necessarily all labs. According to the report, self-referred anatomic pathology services increased at a faster rate than non-self-referred services from 2004 to 2010. During this period, the number of self-referred anatomic pathology services grew from 1.06 million to about 2.26 million services, more than double. During the same period, non-self-referred services grew about 38 percent, from about 5.64 million to about 7.77 million services. Three provider specialties account for about 90 percent of 2010 referrals: dermatology, gastroenterology, and urology. Referrals for anatomic pathology services by these three specialties increased substantially the year after they set up their in-office labs, according to the study. Many hospital and independent laboratories provide the technical components (TC) for these same physicians at a discount. The physician then provides the professional component (PC) and bills Medicare and other third-party payers directly for that service. While there is an anti-markup provision for Medicare beneficiaries for the TC, those restrictions may not always apply to other payers. In this arrangement, both the laboratory and the physician seem to benefit, but there are compliance risks. If there are pathologists in the laboratory, or the laboratory specializes in pathology work, they would rather see both components referred to their laboratory. Some of these arrangements can result in the laboratory providing too much information with the TC work, essentially providing the physician with everything needed to report the professional component without having to perform any real work. If this is done in exchange for referrals of other government work, the Stark and anti-kickback statutes are implicated and both parties could find themselves the subject of government scrutiny. Takeaway: If the GAO study helps bring about a prohibition of physician self-referrals for anatomic pathology services, it is likely that not all laboratories will benefit.