Medscape: GAO Report – It’s All About the Money

Medscape (subscription required) had an article last week called “GAO Suspects Monetary Motive in Physician In-House Pathology“.

Whoo. That’s good. I thought the GAO may have been looking into this with a multi-part report for reasons other than money although  I think that is the charge of the Government Accounting Office. There is now a push to close the in-office laboratory loophole for this reason (among others, the least of which is that these labs do not perform necessarily a quality service but because there is clear incentive biopsy more patients and take more biopsies on said patient each visit).  The story from Medscape reports:

In-house pathology laboratories in specialty practices come under fire as profit-driven in a recent study from the Government Accountability Office (GAO), which has spurred one member of Congress to propose banning self-referred pathology in Medicare.

Anatomic pathology services that physician practices self-referred grew 3 times faster in Medicare from 2004 to 2010 than those performed by outside labs, according to a report issued online in July by the GAO, a federal watchdog agency. The GAO suspects that monetary self-interest helps explain this self-referral boom.

“These analyses suggest that financial incentives for self-referring providers were likely a major factor driving the increase,” the agency said.

The study focused on what the US Department of Health & Human Services (HHS) calls “the most commonly furnished anatomic pathology service.” Officially classified as level 4 surgical pathology in the billing-code bible of the American Medical Association, this service encompasses a broad range of biopsied tissue, including that taken from the prostate, colon, and skin. Physicians use the billing code 88305 when they submit a Medicare claim for this work, which involves slide preparation and both microscopic and naked-eye examination of tissue samples.

Each sample from a single biopsy that a pathologist examines and interprets can be billed by itself, but clinicians also can combine multiple samples into one lab specimen. Physicians can self-refer the service in several ways:

• They can prepare the lab specimen in-house to earn the technical component of the Medicare fee ($36.74 on average), and let an outside pathologist read it.
• They can read a lab specimen — earning the professional component of the fee ($33.34) — that an outside pathology lab has prepared.
• They can both prepare and read a lab specimen in-house to receive the so-called global fee ($70.09).

So, as opposed to a clinician outsourcing the biopsy to a lab to bill the patient, or perhaps work out an arrangement (i.e. client bill) with a laboratory, some clinicians, mainly urologists, gastroenterologists and dermatologists have looked at this as another revenue stream in addition to potentially increased quality with pathologist and clinician “under one roof”, direct communication and less chance for specimen mix-up or loss with less travel.

The GAO it seems thinks though it is just about the money and the money being spent (to the urologists and others) does not justify the benefits.

There is a lively debate in this area with another post over at the The Pathology Blawg  mentioning “Dr. Deepak Kapoor, president of the Large Urology Group Practice Association (LUGPA) has written an article for The Hill entitled “Don’t cancel in-office prostate cancer treatment.”  The article is presumably in response to all the recent talk on Capitol Hill about closing the in-office ancillary services exception to Stark.”

There is more of course.  There are also issues with urologists doing biopsies, self-referring the reads with interests in the lab, then referring those patients to IMRT facilities they own.

It would be like the cardiology group in town owning the Krispy Kreme stores and a few pizza restaurants and hot dog joints.  And perhaps the cardiac catherization suite and owning the cardiothoracic surgeons.

Won’t go into right now whether I think the 36 bucks for the TC and $33 bucks for the PC is fair, just, reasonable, high or low.  The TC was cut by 52% earlier this year with a slight increase to the PC and more cuts are on the horizon.  It’s just worrisome to see what little value we seem to place on pathology services as a society and what some clinical colleagues think of our specialty.

Good thing the government says it is just about money.