Urologists' Self-referral for Pathology of Biopsy Specimens Linked to Increased Use and Lower Prostate Cancer Detection

Federal law allows physicians in some circumstances to refer patients for additional services to a facility in which the physician has a financial interest. The practice of physician self-referral for imaging and pathology services has been criticized because it can lead to increased use and escalating health care expenditures, with little or no benefit to patients. This study examined Medicare claims for men in a set of geographically dispersed counties to determine how the "in-office ancillary services" exception affected the use of surgical pathology services and cancer detection rates associated with prostate biopsies. I found that self-referring urologists billed Medicare for 4.3 more specimens per prostate biopsy than the adjusted mean of 6 specimens per biopsy that non-self-referring urologists sent to independent pathology providers, a difference of almost 72 percent. Additionally, the regression-adjusted cancer detection rate in 2007 was twelve percentage points higher for men treated by urologists who did not self-refer. This suggests that financial incentives prompt self-referring urologists to perform prostate biopsies on men who are unlikely to have prostate cancer. These results support closing the loophole that permits self-referral to "in-office" pathology laboratories.