A proposal to eliminate the in-office ancillary services (IOAS) exception to the Stark law for certain services—including anatomic pathology—appears once again in the President’s Budget. At the same time, it is receiving renewed attention thanks to a January JAMA Viewpoint article highlighting the Government Accountability Office’s latest report on physician self-referrals, a December 2014 AARP letter to Representative Jackie Speier (who sponsored legislation to limit the exception), and a Forbes article titled “Why Physician Self-Referrals Have to Stop Now” (Jan. 26, 2015). In that article, author Dan Munro compared the Stark law and the loophole created by the IOAS exception to speed limits: “There’s a rich history of legislation (Stark and others) designed to address this controversial practice, but the layered exceptions through the years make it too easy to thwart and the rules have become comparable to speed laws that insist on 55 MPH when there’s no capacity to enforce that at any scale.” Organizations such as the American Clinical Laboratory Association (ACLA), the College of American Pathologists (CAP), the American Society for Clinical Pathology (ASCP), and a coalition of health care associations—the Alliance for Integrity in Medicare (AIM)—have spoken out against the IOAS exception. The ACLA, AIM, and […]
A proposal to eliminate the in-office ancillary services (IOAS) exception to the Stark law for certain services—including anatomic pathology—appears once again in the President’s Budget. At the same time, it is receiving renewed attention thanks to a January JAMA Viewpoint article highlighting the Government Accountability Office’s latest report on physician self-referrals, a December 2014 AARP letter to Representative Jackie Speier (who sponsored legislation to limit the exception), and a Forbes article titled “Why Physician Self-Referrals Have to Stop Now” (Jan. 26, 2015). In that article, author Dan Munro compared the Stark law and the loophole created by the IOAS exception to speed limits: “There’s a rich history of legislation (Stark and others) designed to address this controversial practice, but the layered exceptions through the years make it too easy to thwart and the rules have become comparable to speed laws that insist on 55 MPH when there’s no capacity to enforce that at any scale.”
Organizations such as the American Clinical Laboratory Association (ACLA), the College of American Pathologists (CAP), the American Society for Clinical Pathology (ASCP), and a coalition of health care associations—the Alliance for Integrity in Medicare (AIM)—have spoken out against the IOAS exception. The ACLA, AIM, and other organizations released statements praising the President’s FY 2016 Budget for once again including removal of the exception for certain services. The item has now been included in the budget for three years in a row.
In December 2014, the American Association of Retired Persons (AARP) weighed in on the debate in a letter to Representative Jackie Speier. That letter supported efforts to end application of the in-office ancillary services exception to radiation, oncology, anatomic pathology (AP), advanced imaging, and physical therapy, claiming such a change would save Medicare funds and reduce overutilization.
The budget lists potential savings from removing the exception for certain services at $6 billion over a 10-year period.
The CAP has promoted efforts to remove the IOAS exception for anatomic pathology services, arguing in an Issue Brief (“Federal Issue: Self-Referral and the In-Office Ancillary Services Exception”) that the exception “was intended to accommodate certain legitimate physician business arrangements and afford patient convenience. However, AP services are rarely ever done at the time of an office visit.” Thus, the CAP asserts, physicians have an incentive to order anatomic pathology services “to maximize their profits.”
As we reported last year, however, physician groups oppose efforts to do away with the exception (see NIR, March 13, 2014).
Takeaway: Continued attention from various stakeholders and inclusion in the third consecutive federal budget may mean “third time’s the charm” for those hoping to remove the IOAS exception for anatomic pathology.
