MD Self-Referral Issues Target of Utilization Study

In-clinic histology labs and pathology services operated by urology groups come under scrutiny

CEO SUMMARY: When it comes to the in-office ancillary service (IOAS) exception to physician self-referral, the issue of in-clinic pathology services has become a hot potato. Publication in Health Affairs of a study of urologists’ self-referral of their patients for anatomic pathology services attracted national media attention. That study was funded by a grant from two national laboratory associations. The Large Urology Group Practice Association was quick to weigh in with its criticisms of the study.

FAULT LINES ARE APPEARING between the pathology profession and the urology profession over the issue of in-clinic histology laboratories operated by as many as 300 urology practices across the United States.

The latest and biggest earthquake triggered along this fault line was publication of a study titled “Urologists’ Self-Referral For Pathology Of Biopsy Specimens Linked To Increased Use And Lower Prostate Cancer Detection,” by Health Affairs in its April issue. This is a peer-reviewed journal.

This study generated national media coverage about its findings. Particularly notable was a detailed story on April 9 published in The Wall Street Journal with the headline “Prostate Test Fees Challenged.”

Author of the study is Jean M. Mitchell, Ph.D., an economist who is Professor of Public Policy at Georgetown University, in Washington, D.C. She has published more than 80 peer-reviewed articles in leading economics, health services research, and medical journals. One particular focus of her work is physician self-referral.

Funding for the study came in the form of grants to Georgetown University. The grants were provided by the American Clinical Laboratory Association (ACLA) and the College of American Pathologists (CAP). In a document on its website, the CAP described two major findings of the study as follows (underlines by THE DARK REPORT):

The study found that for each prostate biopsy procedure performed, self-referring urologists on average billed Medicare for 72% more anatomic pathology specimens than non self-referring physicians with no increase in cancer detection and no added benefit for the patient.

For those counties included in the study in which physicians self refer, there was a less than 21% cancer detection rate by self-referring urologists vs. a detection rate of 35% by non self-referral urologists. This detection rate is 40% lower for the self referring urologists, on average, despite their billing for nearly twice as many specimens.

The study used Medicare claims data from the years 2005-2007. It was a “targeted-market-area case-study” and looked at pathology services provided to men “who met the selection criteria and resided in a geographically-dispersed set of counties across the United States.” A total of 36,261 cases met the criteria and were part of the study.

Urologists Respond

In response to the publication of the study, a press release titled “Urologists Debunk Misleading, Grossly Inaccurate Prostate Cancer Biopsy Study” was issued by the Large Urology Group Practice Association (LUGPA). This trade group represents 95 urology groups with 1,800 urologists, representing 20% of the nation’s practicing urologists.

“This study simply furthers the political agenda of its sponsors to recapture lost market share and does not deserve credible recognition,” stated Deepak A. Kapoor, M.D., in the press release. He is President of LUGPA and Chairman and CEO of Integrated Medical Professionals, PLLC.

“To suggest that certain [urology] practices are performing extra and unnecessary pathology work for their own remuneration when they are working within rational clinical guidelines is offensive,” he continued. “It shows a total lack of understanding of proper prostate cancer diagnosis.”

More information about the study’s data sources and the LUGPA rebuttal are in the sidebar on page 5. What is important for pathologists and clinical laboratory administrators to understand is the strategic goals of the lab associations that provided the funding for the study.

This is explained succinctly in a document on the CAP website, which states:

The CAP and ACLA are members of a coalition of organizations whose members are affected by self-referral arrangements. This coalition is focused on educating Congress and government agencies on the impact of self-referral on health costs and patient outcomes.

In fact, most pathologists and lab executives are unaware of the coalition referenced in that statement and to which CAP and ACLA are themselves members. This coalition is called Alliance for Integrity in Medicare (AIM).

Besides ACLA and CAP, this coalition includes the American Society for Clinical Pathology (ASCP), American College of Radiology (ACR), American Physical Therapy Association (APTA), Association for Quality Imaging (AQI), and the American Society for Radiation Oncology (ASTRO).

In a published statement available on the Web, AIM states “We seek to remove those healthcare services most susceptible to overutilization and abuse from the IOAS [in-office ancillary services] exception [to the Stark Law], while preserving the ability of robust, integrated and collaborative multi-specialty group practices to offer these services through the exception.”

Credibility of Peer Review

Thus, the study published in Health Affairs is a strategic move by individual members of the AIM coalition to provide the credibility of a peer-reviewed source of information that can be used in discussions with lawmakers as part of an effort to change existing laws. This conclusion is affirmed by a statement on CAP’s website, which reads that “there are legislative and regulatory steps that can be taken to eliminate the financial incentives to self-refer, principally eliminating anatomic pathology services from the In-Office Ancillary Services [IOAS] Exception currently in effect.”

For pathologists wondering what all the fuss is about, the Health Affairs study does mention the amount of money involved in in-clinic pathology labs operated by urology group practices. It notes that Laboratory Economics estimates that 300 urology groups currently operate an in-office pathology laboratory. These groups represent 2,000 urologists and each urologist generates an average of $150,000 per year in revenue from referring patients for pathology services.

Accept these estimates and simple math indicates that in-clinic pathology services are now a $300 million per year ancillary service for those 300 urology groups. That’s an average of $1 million per year per urology group.

Major Dollars Are Involved

THE DARK REPORT observes that these numbers, as presented in the study, give some idea of how much revenue has been lost to Laboratory Corporation of America, Quest Diagnostics Incorporated, other national pathology companies, and independent pathology group practices.

What is true about this matter is that different interests will look at the same situation with different perspectives. The two big questions to be answered by future developments are about “who gets stuck.”

First, are male patients “getting stuck” because of biopsies that are unnecessary? Second, are taxpayers and the Medicare program “getting stuck” due to overutilization of pathology services because of physician self-referral arrangements?

Publication of the Health Affairs study funded by the two lab associations should be considered one salvo in this developing battle. The urology profession may weigh in with a peer-reviewed study funded by their associations in the future. Such an event would further stir this pot.

Study of In-Clinic Path Labs Relies on Certain Data Sets

IN CONDUCTING THE STUDY of urologists’ self-referral of prostate biopsies, author Jean M. Mitchell, Ph.D., an economist and Professor of Public Policy at Georgetown University, selected claims data from the period 2005–07 for samples of Medicare beneficiaries who resided in a designated county, were continuously enrolled in Medicare fee-for-service, and met the criteria for potential candidates for prostate biopsies.

Mitchell conducted her analysis by pooling data from five sources: carrier standard analytical file, outpatient standard analytical file, beneficiary summary file, Medicare physician identification and eligibility registry file, and national provider identification file.

In its critique of the study of urologists’ self-referral of prostate biopsies, the Large Urology Group Practice Association (LUGPA) wrote:

Mitchell hand-selected 11 counties out of more than 3,100 in the United States, reviewing only 9,976 biopsies in urology groups with in-house urology pathology labs. Mitchell claims that positive biopsy rates fell from 27.4% to around 21%, as much as 14% lower than her control group—a claim that is hardly credible given that extended biopsies are reported to increase the detection rate of clinically significant cancer by more than 30%.

To verify this, eight of the largest urology groups from across the United States reviewed their actual positive biopsy rates from their in-house pathology labs. The results were staggering: with between two and seven years of follow-up, an aggregate 42,474 prostate biopsies were per- formed with 16,990 positives, or 40%. This difference between Mitchell’s work, calculated by mathematical manipulation of carefully selected claims data, and actual data derived from real-time tracking of results from a broad cross section of groups can only be explained by a serious flaw in the algorithm Mitchell used to derive her data.



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