Independent Clinical Laboratories Research Articles

Laboratory Outreach: An Overview of Legal Issues

Since the mid-1990s outreach clinical laboratory services provided by hospitals are the fastest growing segment of the clinical laboratory industry. Hospitals have moved in this direction due to consolidation within the independent clinical laboratory sector, which reduced the presence of independent clinical laboratories in many markets, while also perceiving an opportunity to reduce their per test costs by utilizing the excess capacity in their laboratories. Hospitals expanding their outreach services are establishing core laboratories that are independent of the hospital, entering into joint ventures with independent laboratories, or growing test volume in their outpatient departments through an expanded investment in a sales staff. As the trend towards expanding outreach services grows, there are a number of legal issues that must be addressed. This article will discuss the major issues that impact all hospitals expanding their outreach programs, while also identifying how some recent pronouncements by the Internal Revenue Service (IRS) may impact not-for-profit institutions seeking to enter into joint ventures with for-profit independent clinical laboratories. Finally, we will review the implication of federal fraud and abuse laws on some arrangements between hospitals and independent clinical laboratories.

Government Studies of Physician-Owned Laboratories-Reply

In Reply.— The testimony cited in our article summarized the findings of research studies undertaken by the Inspector General and General Accounting Office in 1988 and 1989 and was presented before the Subcommittee on Health of the Committee on Ways and Means of the US House of Representatives on June 1, 1989. 1 Both studies involved primary data collection and analysis of Medicare claims data. In the Inspector General's study, two surveys of health care providers were conducted to determine the prevalence of physician financial arrangements with other health entities and the nature of such arrangements. One survey was of physicians and the other of independent clinical laboratories, physiological laboratories, and suppliers of durable medical equipment. Medicare claims information from the Health Care Financing Administration was used to assess utilization patterns for physicianowners identified in the survey of health care businesses. 2 The General Accounting Office study involved a survey