The Medicare Payment Advisory Commission (MedPAC) is considering three options for addressing problems results from in the in-office ancillary services exception to the Stark law, including excluding certain services from the exception (such as diagnostic tests that are not usually provided at the same time as the office visit).

In-office ancillary services are growing at a rapid pace, and the increased utilization may require narrowing the exception for such services under the physician self-referral law, as well as altering the payment system, the head of MedPAC said at a public meeting Jan. 15.

The physician self-referral law, known as the Stark law, prohibits physicians from referring Medicare or Medicaid patients for certain designated health services to facilities in which they have a financial stake. However, the law does allow physicians to provide most of these services in their office. This in-office ancillary service exception covers areas such as lab tests, physical and radiation therapy, and imaging.

“Over the last several years, there’s been an increase in imaging , lab tests, and physical therapy provided in physician offices,” Ariel Winter, a senior analyst with MedPAC, said at the meeting.

Winter provided three options for controlling the escalation of in-office ancillary services: excluding certain services from the in-office exception, creating new payment tools to reduce the incentive for using such services, and establishing a prior-authorization system for physicians who are self-referring for advanced imaging.

The College of American Pathology (CAP) supports excluding anatomic pathology tests from the exception. MedPAC is expected to make its recommendations in its March report to Congress.