Mitchell says it's time that the government closes loopholes that enable some self-referral. Although there are federal and state laws designed to curb self-referral, one of the biggest exceptions refers to "in-office ancillary services," Mitchell says. The exception allows physicians and group practices to self-refer or "in source" certain health services, such as diagnostic imaging, physical therapy and anatomic "pathology."
"The findings support eliminating the exception that permits physicians to self refer patients to in-office pathology laboratories," Mitchell writes in her study. "Both government and commercial insurers could reduce health care spending substantially by adopting measures to restrict self-referral in this context."
"They should close it down; get rid of the loophole," Mitchell tells HealthLeaders Media.
"Get rid of the ancillary services exception and say you can't do it anymore. That exception was in there originally to deal with doctors who do simple blood or urine tests in their office for patient convenience or for the orthopedic surgeon who had an X-ray machine in his office. It was never meant for pathology services where you have to get a biopsy and send it to the lab. What has happened is that the ancillary services exemption allows doctors who aren't trained in one area to basically incorporate the services and practices of physicians in another area into their scope of practice, which is problematic."
"Self-referral is an important concern in health policy because it injects financial self-interest into decisions regarding patient care," Mitchell wrote. She noted that research on advanced imaging shows that self-referral "results in increased use of imaging and escalating healthcare expenses, with little or no benefit to patients."