Biopsy Self-referrals Draw Congressional Scrutiny

Tuesday, July 16, 2013
By Lance Leider, J.D., The Health Law Firm

In a recently released report the Government Accountability Office (GAO) concludes that physicians who self-referred biopsy procedures cost Medicare approximately $69 million in potentially unnecessary services. To read the entire GAO report, click here.

The report concludes that claims by physicians who self-referred the pathology procedures rose at a much faster rate than those made by physicians who do not self-refer.  The report found that the increased referrals began in the year immediately following the authorization of the self-referral under the Stark laws.

In a Modern Healthcare article released July 15, 2013, Congressman Henry Waxman was quoted as saying, "Today's GAO report sheds new light on the behavior of physicians reaping personal gain by referring patients to services at locations where they have an ownership interest." In today's contentious healthcare environment, comments such as these from ranking congressman can easily signal significant changes in the law and the manner in which it is implemented. Click here to read the entire Modern Healthcare article.

GAO Recommendations.

In addition to its statistical and financial findings, the GAO report suggested that the Center for Medicare and Medicaid Services (CMS):

1.    Adopt requirements that providers of anatomic pathology services flag those services when the procedure was self-referred.

2.    Develop a policy to ensure that all self-referred biopsies are appropriate.

3.    Create a new payment methodology that would limit or eliminate the financial incentives.

CMS officials responded to the report by saying that the first two suggestions made by GAO were not likely to make a significant impact.  However, just because this is the current position of CMS does not mean it will remain so.

With respect to the third suggestion, CMS points to a letter from President Obama requesting that Congress narrow the Stark law exception that permits the self-referral of these types of services.  By closing this perceived "loophole" the President estimated that Medicare could save more that $6 billion over ten years.

Providers Need to Be Aware of the Potential Impact to Their Practices.

According to the GAO, nearly all of the anatomic pathology procedures were performed by gastroenterologists, urologists, and dermatologists.  These providers need to be aware that one of their common practices is under heightened scrutiny.  This scrutiny is very likely to result in changes to the payment methodology and increased audit activity.

It is important to consult with healthcare attorneys who are familiar with evaluating compliance with the Stark laws and regulations as well as Medicare/Medicaid or third-party payor audits.

If you or your facility is providing these types of services it is also very important that you monitor the regulations for any changes affecting your operations.

Don't Wait Until It's Too Late; Consult with a Health Law Attorney Experienced in Medicare and Medicaid Issues Now.

The attorneys of The Health Law Firm represent healthcare providers in Medicare audits, ZPIC audits and RAC audits throughout Florida and across the U.S. They also represent physicians, medical groups, nursing homes, home health agencies, pharmacies, hospitals and other healthcare providers and institutions in Medicare and Medicaid investigations, audits, recovery actions and termination from the Medicare or Medicaid Program.
For more information please visit our website at or call (407) 331-6620 or (850) 439-1001.


What do you think of the GAO’s report and recommendations? Please leave any thoughtful comments below.


Lee, Jamie. “Self-Referrals Costing Medicare Millions, GAO Report Says.” Modern Healthcare. (July 15, 2013). From:

United States Government Accountability Office. “MEDICARE Action Needed to address Higher Use of Anatomic Pathology Services by Providers Who Self Refer.” (June 2013). From:

About the Authors: Lance O. Leider is an attorney with The Health Law Firm, which has a national practice. Its main office is in the Orlando, Florida, area.  The Health Law Firm, 1101 Douglas Avenue, Altamonte Springs, Florida 32714, Phone:  (407) 331-6620.

Tag Words: Physician, physicians, self-referral, Government Accountability Office (GAO), Medicare, Medicare audit, Medicaid, Medicaid audit,  self-referring physicians, non-self-referring providers, biopsy procedures , pathology services, dermatologists, gastroenterologist, urologist, Center for Medicare and Medicaid Services (CMS),  Department of Health and Humans Services (HHS), Stark Law, defense attorney, defense lawyer, Medicare lawyer, Medicare attorney, Medicaid attorney, Medicaid lawyer, Florida attorney, Florida lawyer, The Health Law Firm

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