The Honorable William Thomas
U.S. House of Representatives
2208 RHOB
Washington, DC 20515

Dear Representative Thomas:

The House Ways and Means Subcommittee on Health recently conducted a hearing on the appropriateness and implementation of the Stark self-referral statutes. The American Association for Clinical Chemistry (AACC), representing nearly 11,000 professional laboratory scientists, urges you to maintain the current prohibition against physicians referring patients to clinical laboratories in which the physician has a financial interest. We believe the intent of the original legislation, to significantly reduce the ordering of unnecessary laboratory testing, remains valid. We also believe that the data gathered over the past few years, both by the government and private sector support the need for this prohibition.

The Department of Health and Human Services (DHHS) Office of the Inspector General (OIG) performed a study in 1989, which found that patients of referring physicians who owned or invested in independent clinical laboratories received more services than Medicare patients in general. In fact, the study reported that such physicians ordered 45 percent more services, costing the Medicare program $28 million.

A 1991 study by the Florida Health Care Cost Containment Board confirmed these findings. In addition to lab services, physician owners were overutilizing diagnostic imaging services and physical therapy services. A follow-up study by the General Accounting Office (GAO) for the Ways and Means health subcommittee reported that physician owners had a higher referral rate for all types of imaging services than non-owners. The GAO concluded their report stating "we believe this analysis of referral for imaging services, together with our earlier analysis of referral patterns for clinical laboratory services, illustrates a broad potential for higher use and higher costs through self-referral."

The American Medical Association (AMA), which is the largest physician association, has testified in the past stating that "physicians should not refer patients to a health care facility outside their office practice at which they do not directly provide care or services when they have an investment interest in the facility." A similar statement is listed in the AMA's Code of Medical Ethics. AACC agrees with the AMA's statement and recommends that the Subcommittee on Health maintain the self-referral prohibition on clinical laboratory services and other areas with documented referral problems.

By way of background, AACC is the principal association of professional laboratory scientists--including MDs, PhDs and medical technologists. AACC's members develop and use chemical concepts, procedures, techniques and instrumentation in health-related investigations and work in hospitals, independent laboratories and the diagnostics industry nationwide. The AACC's objectives are to further the public interest and educational activities and to help maintain high professional standards.

If you have any questions or we may be of any assistance, please call me at (405) 271-3571 or Vince Stine, Director, Government Affairs, at (202) 835-8721.



K. Michael Parker, PhD

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