GAO Reports Physicians Who Self-Refer Anatomic Pathology Cost Medicare Millions

The College of American Pathologists (CAP) called attention to a new report from the Government Accountability Office (GAO) documenting millions of dollars in wasteful health care spending by physicians who self-refer anatomic pathology services, and called on Congress to take immediate action outlawing this business practice. The GAO study found that financial incentives for self-referring providers were likely “a major factor driving the increase in anatomic pathology referrals”, and in 2010, providers who self-referred made an estimated 918,000 more referrals for anatomic pathology services than they likely would have if they were not self referring. CMS estimated these additional referrals cost Medicare about $69 million in 2010. Per CAP, the only correct course of action now is to remove anatomic pathology from the In-Office Ancillary Services (IOAS) exception as quickly as possible. CAP is the leading critic of a loophole that exists in the IOAS exception in the physician self-referral law, aka the Stark Law. The IOAS exception allows physicians to bill for certain medical services where an ownership interest exists.  It was intended to apply to services provided at the time of an office visit as a convenience to patients.  It also specifies clinical laboratory services rather than anatomic pathology.