ACLA Calls on CMS to Address Questionable Medicare Utilization Practices Through Stronger ‘Stark Law’ Provisions

Washington, D.C. – In a new comment letter to the Centers for Medicare & Medicaid Services (CMS), the American Clinical Laboratory Association called on the agency to address the long-standing abuse of the physician self-referral law (“Stark Law”) that has lead to persistent overutilization of specific services across the Medicare program.

While CMS’ Request For Information on the Stark Law largely centered on how the law may impede value-based care models, ACLA highlighted the need to address the persistent challenges raised through questionable utilization under the in-office ancillary service exception. One of the most immediate and impactful approaches to addressing this ongoing problem would be for CMS to remove anatomic pathology services from the Stark Law’s in-office ancillary services exception. Published research has shown that urologists who self-referred submitted claims to Medicare for 4.3 more specimens per prostate biopsy than the mean number of six specimens per biopsy sent by urologists to an independent laboratory. These physicians billed the Medicare program for 72 percent more specimens for patients with suspected prostate cancer than those urologists who did not have such arrangements. Despite the increased testing and billing, the per-patient cancer detection rate for self-referring urologists was actually only 20.9 percent, as opposed to 35.4 percent for non-self-referring physicians—a difference of more than 14 points.

As ACLA’s letter notes, “The continued inclusion of anatomic pathology services under the IOAS exception exemplifies how implementation of the exception is far from what Congress originally intended. CMS allowed anatomic pathology services to fall under the exception, and the agency now needs to correct the problems caused by the services’ inclusion therein.”

ACLA also supported the establishment of narrowly-tailored exceptions to the Stark Law to accommodate value-based care arrangements and alternative payment models that promote coordinated care, where such arrangements eliminate inappropriate financial incentives for self-referral. Further, clinical laboratories support a more streamlined process for an Advisory Opinion about whether a particular arrangement would comply with the Stark Law.

To view the full comment letter, click here.

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 About the American Clinical Laboratory Association

ACLA is a not-for-profit association representing the nation’s leading clinical and anatomic pathology laboratories, including national, regional, specialty, hospital, ESRD and nursing home laboratories. The clinical laboratory industry employs nearly 277,000 people directly and generates over 115,000 additional jobs in supplier industries. Clinical laboratories are at the forefront of personalized medicine, driving diagnostic innovation and contributing more than $100 billion to the nation’s economy.

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