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Physician Groups Divided on GAO Self-Referral Report

Margaret Dick Tocknell, for HealthLeaders Media, July 29, 2013

Financial incentives for self-referring providers "were likely a major factor driving" an increase in referrals and millions of dollars in unnecessary Medicare costs, a Government Accounting Office report finds.

A Government Accounting Office report which finds that physician self-referrals for anatomic pathology services accounts for millions of dollars in unnecessary Medicare costs has some physician groups calling 'foul.' Others say the findings bolster an argument for legislative changes in federal law.

The GAO report, released two weeks ago, looks at the effects of physicians sending patients to facilities where a provider or family member has an economic interest. It focused on the use of anatomic pathology services between 2004 and 2010. The GAO conducted the study in response to questions about the role of self-referral in growing Medicare Part B expenditures, which include physician and other outpatient services.

Although the federal Ethics in Patient Referrals Act (also known as the Stark law) generally prohibits self-referrals under Medicare, exceptions are permitted for certain in-office ancillary services (IOAS), including anatomic pathology services. The idea is to allow the services to be offered during an office visit as a patient convenience.

Among the GAO report findings for anatomic pathology services:

  • The number of self-referred services more than doubled, from 1.1 million to 2.3 million, while non-self-referred services grew by about 38% from 5.6 million to 7.8 million.
  • Three provider specialties: dermatology (58%), gastroenterology (15%), and urology (16%), accounted for 90% of referrals for self-referred anatomic pathology services in 2010.
  • In 2010 alone the GAO found that unnecessary anatomic pathology services cost Medicare $69 million.
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1 comments on "Physician Groups Divided on GAO Self-Referral Report"


erowe (8/6/2013 at 5:39 PM)
The article neglected to mention that if the In Office Exception is eliminated, many more Medicare services will be provided in hospital outpatient departments, which costs much more (sometimes more than 2 times more) than services provided in a physicians' office. The GAO reports also ignored this consideration, so their conclusion that this self referral cost more money than if those physicians had to send the studies out, is invalid. The CAP has a very vested interest in this issue, because they will get all the business that is denied to the treating physicians who are "self referring".