In a previous note (see: Pathologist Satisfaction with "Pod Lab" Positions), I used the term pod lab in an incorrect way. My better understanding of the term comes after a conversation with Joe Plandowski who consults in this area. His web site is Twincrest. A pod lab is synonymous with a condo lab and both terms are used to refer to an off-site histology lab used to process tissue specimens for a medical practice. Medicare billing for both types of labs are highly restricted under CMS anti-markup rules and thus unappealing. The term that I should have used in my note was an in-office lab which is the proper term for a lab that is built, owned, and operated by a group of clinicians such as gastroenterologists or urologists. Such a lab processes tissue specimens obtained for diagnostic purposes by the physicians working in the group that are then read and reported out to the group by an in-house pathologist.
Joe tells me also that CMS (Centers for Medicare and Medicaid Services) is now in the process of loosening its regulations such that an in-office histology lab no longer needs to be built inside of the suite of offices of the medical group but will need to be located inside the same building. Joe also tells me that, in his experience, the pathologists engaged to interpret the slides that are processed by in-office labs most commonly work on a fee-for-service, contracted basis for the medical group.
The installation of an in-office histology lab and the interpretation of the slides by a pathologist contractor to the group can be extremely lucrative for the group. The development of such a strategy is a substitute for sending the specimens to a commercial surgical pathology lab or to the local hospital pathologists. The commercial labs will be hit hardest by this emerging business model because office practices are the major source of specimens for such labs. Hospital pathology groups will still maintain control over inpatient specimens and those outpatient specimens generated by physicians working within the health system. The quickening pace of the emergence of large clinical groups and the financial appeal of in-office histology labs for them suggests that pathology groups and commercial labs may soon need to write off much of their small-specimen, office-generated business.