Physician office laboratory

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The early physician's laboratory was certainly more modest than the 21st-century POL.

A physician office laboratory (POL) is a physician-, partnership-, or group-maintained laboratory that performs diagnostic tests or examines specimens in order to diagnose, prevent, and/or treat a disease or impairment in a patient as part of the physician practice.[1][2] The POL shows up in primary care physician offices as well as the offices of specialists like urologists, hematologists, gynecologists, and endocrinologists. In many countries like the United States, the physician office laboratory is considered a clinical laboratory and is thus regulated by federal, state, and/or local laws affecting such laboratories.[2][3]

POL workflow

Typically, clinical laboratory workflow roughly works as such:

  1. The physician orders a lab test for a patient.
  2. A specimen is collected from the patient.
  3. The specimen is packaged and processed according to specifications.
  4. The specimen is delivered to a reference laboratory for testing.
  5. Tests are performed on the specimen as ordered.
  6. Results and analysis are reported back to the physician, who reviews them.
  7. The physician discusses the results and options with the patient.

If the workflow bypasses the reference lab in favor of an in-office physician laboratory:

  1. The physician orders a lab test for a patient.
  2. A specimen is collected from the patient.
  3. The specimen is sent over to the in-office laboratory.
  4. Tests are performed on the specimen as ordered.
  5. Results and analysis are reported back to the physician, who reviews them.
  6. The physician discusses the results and options with the patient.

The difference in these two workflows mostly comes down to the time spent in transporting the specimen to an outside lab and waiting for the processing. The in-office lab saves time in those parts of the process. This can be advantageous, as seen in the next section.

Advantages and disadvantages of the POL

Advantages include[4][5]:

  • quicker access to test results for the clinician, leading to more treatment options for the patient;
  • greater efficiency of the clinical workflow;
  • cheaper testing, though subject to individual test and pricing information; and
  • patient comfort and happiness, including time saved by having to go only to one location.

Disadvantages include[4][5]:

  • the physician office being the only point-of-access, with some physicians not willing to release patient information to an outside party (such as a hospital or competing clinician). This disadvantage may be eliminated due to regulatory changes in April of 2014, now allowing patients direct access to their laboratory results[6];
  • patients not feeling comfortable about the physician's office being the central repository of information, and physicians may not see the value in having a lab in their practice; and
  • the cost of meeting compliance requirements for local, state, and federal regulations, especially in states with stricter requirements.

POLs in the United States



The urinalysis was commonly performed not only at the bedside but also in the physician office laboratory during the nineteenth century.

Throughout the mid- to late 1800s, both the university and hospital laboratory played an important role in helping physicians diagnose disease[7][8][9], followed by the bedside care and analysis of the physician. However, the physician office laboratory also contributed to diagnoses, especially in the latter decades of the century.[9][10][11]

Whether at the hospital lab, the bedside, or the physician office, the urinalysis was a common and important test utilized in diagnosing illness.[12] For the POL in particular, however, the 1890s brought more accessible tests like water examination, poisonous metals analysis, and tests for hypersecretion of hydrochloric acid in the stomach.[10][11][13] Equipment like a water incubating oven, microtome, sterilizer, pipettes, reagents, evaporating dish, centrifuge, and microscope were also more readily available to the physician running their own laboratory.[13][14][15][16]

1900 to 1979

The promotion and success of the physician office laboratory continued on into the first decade of the twentieth century, with most urban physicians able to perform analysis of urine, blood, sputum, and feces.[17][18] Yet the first two decades of the 1900s also saw the slow rise of the "commercial laboratory," a privately- or group-held clinical pathology, chemical, or radiological lab that processed laboratory tests or chemical compounds ordered by a referring physician.[19][20] (Though the same idea, the term "referral lab" didn't begin to appear in medical literature regularly until the early 1950s and "independent laboratory" until the mid-1960s.[21][22][23] ) While some physicians — especially those in thriving urban areas — had a large enough clientele to invest in laboratory equipment and supplies for their own office, others in rural areas were less likely to be able to afford such luxuries. In the latter case, physicians were not able to as effectively provide a clinical diagnosis to their patients. These physicians had to either hope for connections at community regional hospitals to utilize the hospital laboratory (if they were even in reasonable distance or had the testing tools) or find some other means of sample testing.[24] Practitioners and businesspeople alike saw an opportunity for the commercial laboratory to fill those gaps.

However, around the early 1920s, the push for or against the increasingly popular commercial laboratory became more noticeably vocal. Some physicians, specialists, and dentists complained heavily of the lack of quality standards, regulations, and ethics inherent in for-profit clinical, chemical, and radiological laboratories.[25][26][27][28] An alternative was at times proposed in the form of a state or local diagnostic lab or a referral-only "clinic" that could be well-equipped with professional tools, staff, and procedures, critical for rural areas and usable for more than just public health care diagnoses.[29][30] However, other medical professionals, while recognizing the need for more professional laboratory environments and more ethical advertising, dismissed those declaring the commercial laboratory as "evil,"[31] content to state those types of labs were needed and then fully entrenched in the health care environment.[29][27]

The for-profit clinical laboratory, however, would only garner minor prominence until the '70s and '80s. In the meantime, organizations like the American Society of Clinical Pathologists' (ASCP's) Board of Registry (1928) and the American Society of Medical Technologists (1932) began appearing to help promote higher standards in clinical laboratory standards, whether it be in the commercial laboratory, the hospital laboratory, or the physician's office.[32] [33] And with the ever-increasing variety of tests and associated equipment (as well as the demand for it), clinical laboratory practice continued to move out of the physicians office and into the hospital laboratory.[34][35][36][37]

On December 5, 1967, the U.S. enacted Public Law 90-174, which included in Section 5 the "Clinical Laboratories Improvement Act of 1967." CLIA '67 set regulations on the licensing of clinical laboratories and the movement of samples in and out of them across state lines. Laboratories would be eligible for a full, partial, or exempt CLIA-67 license, depending on the laboratory's conducted tests.[38] However, CLIA '67 wasn't thorough, and only about 12,000 of nearly 200,000 U.S. laboratories were regulated. Physician office laboratories in particular were unaffected by the regulations.[39] Another attempt was made to place more clinical labs into the regulation net, with proposed but unsuccessful legislation in 1976 and 1977 that would have extended federal licensure to all hospital and independent laboratories. POLs again would have been exempted, requiring only participation in a federal proficiency testing program.[40]

The U.S. National Center for Health Statistics (NCHS) reported in its 1965 publication of Health Resources Statistics the following statistics for laboratories[41]:

  • In 1958, around 6,500 to 7,000 hospitals labs employed roughly 45,000 to 50,000 personnel.
  • In 1962, physician office laboratories employed roughly 25,000 to 30,000 personnel.[42]
  • In 1962, around 2,000 independent/commercial labs employed roughly 10,000 personnel.

The publication didn't mention the number of POLs in 1962. One could arguably assume hospital labs still outnumbered POLs that year. In the last year of its publication of Health Resources Statistics (1976–1977), the NCHS reported "[t]he largest number of clinical laboratories are in the offices of private physicians, and the next largest number are in hospitals,[43]" indicating a potential flip-flop in lab numbers over a period of nearly 15 years. The increase in POLs during the 1970s has been largely attributed to the technological development of small, affordable analyzers; more affordable office laboratory equipment; and the convenience associated with in-office testing.[44]

The 1976–1977 report is also notable for its focus on the "independent clinical laboratory" (the commercial clinical laboratory) as defined by Medicare, indicating an increase from 2,355 such labs in 1967 to 3,024 on January 1976.[43]

1980 to 2021

Between 1983 and 1984 physician office testing increased by an estimated 11 percent, while the volume of physician-referred diagnostic tests to third-party labs declined 2 percent[45], likely buoyed by relatively inexpensive in-office laboratory equipment and more efficient drug monitoring capabilities.[46] The Deficit Reduction Act of 1984 further helped to increase the number of physician office laboratories by eliminating physicians' ability to mark up tests sent out to referral labs. Additional changes to Medicare reimbursement meant the laboratory that performed the tests got paid, while physicians were suddenly limited to a $3 payment per patient visit for collecting and distributing specimens. As physician laboratories were at that point still not regulated, physicians and equipment vendors alike saw an opportunity to expand physician office laboratory functions.[45] By the end of 1985, 10 percent of group practices with one to five physicians and 40 percent of those with six to 25 physicians were operating POLs.[47] In 1989, an estimated 98,400 POLs were operating in the United States, conducting roughly 25 percent of all laboratory testing in the country. Estimates from the time vary from 20,000 to 200,000 due to the lack of a standard definition for a POL and the need for physicians to self-report the status of their lab.[48] Some of these issues continue to persist today, as states often have different definitions for a POL.

On January 1, 1987, the Health Care Financing Administration ruled physicians must accept assignment for performed in-office Medicare lab testing, significantly cutting physician revenues. This, combined with plans from third-party to reduce POL payments and increased pressure on Congress to regulate POLs like other clinical laboratories, led to suggestions of physicians banding together into limited partnerships to start their own reference labs.[47] That pressure on Congress led to the signing into effect of the Clinical Laboratory Improvement Amendments (CLIA) on October 31, 1988.[49] Regulations for implementing CLIA continued to be developed afterwards, with the Department of Health and Human Services considering thousands of comments to the proposed regulations. The final regulations were published February 28, 1992, set to be effective on September 1 of the same year. The new CLIA regulations put into place regulations concerning test complexity, certification, proficiency testing, patient test management, personnel requirements, quality assurance, and other processes in the clinical laboratory, including physician office laboratories.[50] Additional controls were placed on POLs that year by the Stark Amendment, which sought to prohibit physician referrals of designated health services for Medicare and Medicaid patients if the physician or an immediate family member had a financial relationship with that entity.[51]

By 1993, some physicians running POLs were already protesting CLIA, stating the legislation imposed too many rules, regulations, and fees on physicians who perform any kind of in-office testing.[52][53] A mix of public commentary and internal consideration caused the effective date of CLIA for labs to be extended on several occasions afterwards: on December 6, 1994 in the Federal Register (59 FR 62606), May 12, 1997 in the Federal Register (62 FR 25855), October 14, 1998 in the Federal Register (63 FR 55031), and December 29, 2000 in the Federal Register (65 FR 82941).[54]

"The extensions allowed previously unregulated laboratories time to understand and implement these requirements. The extensions also provided the Department of Health and Human Services (HHS) additional time to issue revised QC requirements, review board certification program requests for approval, and ensure that laboratory directors with a doctoral degree had sufficient time to successfully complete the requirements for board certification."[54]

Surveys conducted by Mathematica Policy Research in 1991 and again in 1995 provided data that suggested "that CLIA '88 was primarily responsible for the reduction of in-office laboratory testing between 1991 and 1995. While more than 70% of practices surveyed have reduced or eliminated testing during this period, we found that a vast majority of those surveyed (64%) cited CLIA '88 as the force driving this change."[55] Yet by 2000, some physicians were still espousing the benefits of the POL despite the implementation of CLIA, stating that CLIA fees, proficiency testing fees, inspection fees, and staff time account for only roughly about three to four percent of overall lab costs.[4] However, a 2003 report from the College of American Pathologists found "a small, slow drop-off in the POL market as some laboratories close or move to waived testing.[56]"

In late 2010, POLs were estimated to be processing only about eight percent of all clinical laboratory tests.[57] That number went up to nine percent in late 2014.[58]

In early 2011, researchers estimated the worldwide market for in vitro diagnostic (IVD) company sales from over 100 companies to POLs was valued at around $2.3 billion U.S.[59][60]

Regulatory considerations

Operators of POLs in the United States face individual state, local, and federal regulations to ensure full compliance of their operations. The following are the three regulations most likely to affect the POL and the physician office.


The Clinical Laboratory Improvement Amendments (CLIA) arguably have the largest effect on the physician office laboratory. The U.S. federal statute was implemented in 1988 to remove obsolete laboratory requirements and include new requirements to improve the quality of a modern clinical laboratory. Most POLs operate as CLIA waiver labs. Waived tests have a low risk of an incorrect result; this includes the tests the Food and Drug Administration (FDA) has approved for consumers to use in their homes.[61] Tests performed under this provision are done at laboratories that have registered as required by CLIA and obtained a certificate of waiver. These labs are not inspected on a routine basis like labs certified to perform moderate- and high-complexity testing. Laboratories that wish to change their status from waived to one of the other statuses must comply with the CLIA requirements for registration, inspection, and proficiency testing as outlined in the law. Waived laboratory staff, as previously mentioned, does not require proficiency testing, and anyone can be qualified to be the laboratory director.[61]


POLs in the U.S. are also required to comply with the Health Insurance Portability and Accountability Act (HIPAA) and must provide safeguards for the security and privacy of the data collected and maintained in the laboratory. HIPAA passed in 1996 in an attempt to provide better guidance regarding the privacy and security of data, portability of health insurance, and better accountability for violations related to these topics. Laboratories are required to implement measures that prevent the unauthorized disclosure and access to data in the laboratory.

Prior to 2014, most laboratories were exempt from the HIPAA requirement to provide patients with lab results or other protected health information.[6] However, in February 2014, the Department of Health and Human Services wanted to provide patients the opportunity to become better members of their own care team by giving them more information about their health. This resulted in the amendment of CLIA 1988 to require a laboratory to give a patient, or their designated representative, lab results within 30 days of said individual sending a written request.[6] Laboratories are still required to ensure those accessing this data have authorization to do so, as the original requirements to keep data secure and private remain the same.

Since the POL is located at the physician office, access to results is most likely determined by the provider’s regular procedures for acquiring personal health information (PHI). The POL could provide forms to patients for release of PHI, just as any other lab can, but it is unclear as to how this rule change will impact the POL in the long term.


The most difficult regulation to assess in correlation to the POL is the Patient Protection and Affordable Care Act, also known as the ACA. This does not negate the obligations of the laboratory under CLIA and HIPAA. According to the Clinical Laboratory Coalition, laboratory testing informs about 70% of a clinician’s medical decision-making process. However, the laboratory comprises less than two percent of Medicare spending.[62]

The Patient Protection and Affordable Care Act (PPACA) included a direct cut to the Medicare Clinical Laboratory Fee Schedule of 1.75 percent each year for 5 years. This 9 percent cut is the largest cut among all Part B providers and started in 2011. In PPACA, clinical laboratories also received another cut in the form of a productivity adjustment, resulting in an additional 11 percent cut over 10 years.
The laboratory-specific cut and the productivity adjustment will already result in a cumulative 20 percent cut over 10 years. Laboratories are also facing up to a 2 percent cut to the fee schedule as a result of sequestration, which begins in January 2013.[62]

The laboratory space in general may face challenges from the accountable care organization (ACO) model under the PPACA, due to a decrease in laboratory testing volume.[63] Under the ACO model, unnecessary or redundant testing would be discouraged.[63]

Present and future state of U.S. POLs

Since reaching a peak of around 50.7% of all CLIA-certified labs in the U.S. in June 2011[64], the prevalence of POLs compared to other lab types has noticeably dipped. In May 2022, the Centers for Medicare and Medicaid Services (CMS) reported 40% of all CLIA-enrolled laboratories in the United States (133,062) were physician office laboratories, down more than 10% since June 2011.[65] Since June 2011, lab types like pharmacy, assisted living facility, and school/student health service labs have picked up much of the ground the POL has lost.[64][65] While the overall number of POLs continues to grow, the decrease in POLs as a percentage of all CLIA-certified laboratory types may be attributed to a number of factors, including the urine drug screen investigations of the 2010s[66][67], a series of reimbursement reductions[68][69], and even the COVID-19 pandemic.[70] Some like COLA director of accreditation Susan Densford and Marwood Group Advisory's Mark Slomlany suggest that reimbursement issues have been less impactful to the POL, but rather a consolidation pattern of physician offices—and thus POLs—is and will continue to be a major factor.[71][72] Writing for Marwoord, Slomlany notes:

Marwood believes that consolidation among physician office labs as well as joint ventures with independent labs are expected to increase over the next 3-5 years. It is unlikely that this is currently being driven by reimbursement pressure, which has not been as severe as that faced by large independent laboratories, but rather by larger macro trends shaping the industry. Namely, as growing health systems acquire physician practices as part of their geographic footprint, the expectation is that they funnel work back into outreach labs.

As of May 2022, 70.6% of the non-exempt POLs in the United States today are running Clinical Laboratory Improvement Amendments (CLIA) waived tests, and 17.5% of non-exempt POLs hold provider performed microscopy (PPM) certificates.[73] Compared to June 2011, when 56.1% of POLs were running CLIA-waived tests and 26.5% were running PPM testing[74], it's clear that POLs have moved even further into predominantly performing CLIA waived testing. A July 2021 article by COLA's Irwin Z. Rothenberg suggested that the increase in waived testing in the POL has been influenced by a number of factors, including[75]:

  • technical advances in point-of-care systems, that bring improved rapid, high-quality testing closer to the patient;
  • a greater abundance and variety of CLIA-waived tests for clinical testing;
  • a greater decentralization of laboratory services away from core laboratories; and
  • more CLIA-waived testing moving into drug abuse or pain management clinics.

While the percentage of labs performing PPM and other forms of moderate testing has gone down since 2011, some like Repertoire magazine's Mark Thill envision those numbers slowly increasing again in the future. Thill and others note the rapid technological developments in molecular diagnostics testing, shifting some CLIA moderate molecular tests to waived, and other high-complexity molecular test to moderate. POLs wanting to perform more COVID-19 testing for their patients may also be a motivating factor to move up to CLIA moderate testing. This move to moderate may also be compelling to larger physician practices of five or more physicians wanting to conduct a higher throughput of both waived and moderate testing.[71]

Testing and reporting

The complete blood count, typically done with an automated analyzer, is a common test performed in the POL today.

In the United States, CLIA lays out seven criteria for determining the complexity of a test, including the origin of the test.[61] For example, if a new test is developed or an existing test is modified, and then it's used at that laboratory, the test is automatically rated a high-complexity test. The complexity of the test determines the requirements the laboratory needs to comply with in order to maintain regulatory compliance. The more complex the test is, the stricter the requirements are.[61]

Test complexity has three levels: high, moderate, and waived.[61] Waived tests are simple to perform and have a relatively low risk of an incorrect test result. Moderately complex tests include tests like provider performed microscopy (PPM), which requires the use of a microscope during the office visit. Providers that want to perform PPM tests must be qualified to do so under CLIA regulations.[61]

High-complexity tests require the most regulation. These tests are the most complicated and run the highest risk of an inaccurate result, as determined during the FDA pre-market approval process. Tests may come from the manufacturer with their complexity level on them, or one can search the FDA database to determine the complexity of the test.[61] It is important to understand the complexity level of the testing provided in order to ensure full compliance with CLIA.

Commonly performed tests include[76][77]:

  • urine analysis
  • urine pregnancy
  • blood occult
  • glucose blood
  • bacterial and viral infection
  • sexually transmitted infection
  • pathology consultation during surgery
  • crystal identification by microscope
  • sperm identification and analyses
  • ovulation testing
  • THS and FHS testing
  • bilirubin total
  • blood gasses
  • complete blood count
  • bone marrow smear
  • blood bank services
  • transfusion medicine

Just as POLs manage a set of commonly performed tests, a set of corresponding reports provides the results of those tests. The results will pass through a set of validation and quality control checks before being fashioned into a final report for the ordering physician. For example, if a complete blood count is ordered by the physician, a corresponding patient report is produced by the laboratory, often through a laboratory information system (LIS). The patient report contains patient, physician, and sample demographics, as well as the results and whether they are above, below, or within recommended limits. Other types of reports may be generated in the laboratory, including daily summary, test total, and various quality control reports.

POLs in other parts of the world

Little in the way of public information (in English) is available concerning the practices, regulations, and markets involving physician office laboratories in other parts of the world. Market research companies like Kalorama Information and Transparency Market Research have conducted research into the marketing and regulatory environments of POLs around the world[78][79], but that research has generally not been freely available to the public.

In November 2014, however, Kalorama did make public a few statistics about POLs outside the United States, including the following[58]:

  • Non-U.S. POL markets "are defined by the strong stance of regulators and payers who have effectively both crafted and blocked POL diagnostics market development."
  • While Germany leads European countries in IVD market size, several factors have contributed to stunted POL growth there, including "cuts to clinical testing or pathology payments under the public insurance program GKV," the growth of POL alternatives such as the local physician-supported lab or Laborgemeinschaften, and limitations on allowed POL procedures.
  • Japan's POLs are largely focused on rapid flu testing, while other point-of-care tests and devices have been slow to move from hospitals and emergency care centers to the POL environment.
  • "In India, rapid growth in out-of-pocket and private insurance payments has encouraged the build-out of private clinics and primary healthcare centers. Many such businesses perform in-office tests such as CBCs, ESR, glucose, chemistry panels, lipid panels, and urinalysis."
  • The remaining "middle-income and developing countries outside of Europe, North America and Japan [represent] only 5% of the global POL market."
  • The rise of "diabetes, hypertension, heart disease, and obesity" have led to a generally increased demand globally for IVD, POL-friendly tests "such as lipid panels, HbA1c, and cardiac markers."

Further reading

  • Kotlarz, V. R. (1998). "Tracing our roots: origins of clinical laboratory science". Clinical Laboratory Science 11 (1): 5–7. PMID 10177215. 


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