Physician office laboratory

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]

In early 2011, researchers estimated the worldwide market for in vitro diagnostic company sales from over 100 companies to POLs was valued at around $2.3 billion U.S.^[4]

POLs in the United States

History

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^[5], likely buoyed by relatively inexpensive in-office laboratory equipment and more efficient drug monitoring capabilities.^[6] 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.^[5] 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.^[7]

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.^[7] That pressure on Congress led to the signing into effect of the Clinical Laboratory Improvement Amendments (CLIA) on October 31, 1988.^[8] 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.^[9] 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.^[10]

In December 2013, the Centers for Medicare and Medicaid Services (CMS) reported nearly half of all CLIA-certified laboratories in the United States (120,399) were physician office laboratories.^[11] However, as of December 2010 POLs only processed about eight percent of all clinical laboratory tests.^[12]