Pathology, anesthesia, and infusion services can meaningfully improve GI practice economics. They can also generate federal enforcement exposure if the structure is wrong. The two outcomes depend on the same set of regulatory requirements.
Key Takeaways
- The Stark Law in-office ancillary services (IOAS) exception permits GI groups to refer Medicare patients for pathology processed in the group’s own lab, but the anti-markup rule limits the amount billed when the technical component is purchased from an outside reference lab.
- The HHS OIG has repeatedly clarified that satisfying a Stark exception does not insulate an arrangement from Anti-Kickback Statute scrutiny – both statutes must be analyzed separately for each ancillary structure.
- Infusion services for biologics under Medicare Part B reimburse at ASP plus 6 percent; practices should model the actual realized margin after drug cost, nursing time, chair time, and administration overhead – which in some cases leaves a narrower margin than the gross payment suggests.
- Anesthesia for endoscopy is the ancillary line most vulnerable to commercial payer carve-outs; multiple Blue Cross plans introduced anesthesia bundling logic in 2024 and 2025 that compresses the per-procedure revenue at ASC sites.
Gastroenterology has more legitimate ancillary revenue opportunity than almost any other physician specialty. Pathology generated by every biopsy and polypectomy. Anesthesia delivered in the same procedure room as the endoscopy. Infusion services for the biologics that treat inflammatory bowel disease and other conditions managed over time. Each of those lines has a real economic case, and each has a regulatory perimeter that has to be understood before the arrangement is designed.
The HHS Office of Inspector General has been clear, and became more so in an April 2026 advisory that reiterated a core principle: satisfying a Stark Law exception does not insulate an arrangement from Anti-Kickback Statute scrutiny. The two statutes operate independently. Stark is a strict-liability civil statute that asks whether a financial relationship exists and whether it meets the technical requirements of an exception. The Anti-Kickback Statute is an intent-based criminal statute that asks whether an underlying purpose of the arrangement is to induce referrals. A GI group can meet every Stark requirement for in-office ancillary services and still have an AKS problem if the structure was designed primarily to generate referral economics rather than to serve a genuine patient-care rationale. Get both analyzed by counsel who does healthcare regulatory work before you sign anything.
Pathology: What the In-Office Ancillary Exception Actually Permits
The Stark Law’s in-office ancillary services (IOAS) exception allows a group practice to refer Medicare patients for designated health services – including pathology – that are performed within the group’s own practice by the group’s own personnel, without triggering the self-referral prohibition. For a GI group that processes biopsy and polypectomy specimens in its own on-site or affiliated pathology operation, the exception is available when the technical requirements are met: the service must be furnished in the same building where the referring physician provides services, or in another location used exclusively by the group, and the billing must be by the group or a physician who is a member of the group.
The anti-markup rule adds a separate constraint. When a physician practice purchases the technical component of a pathology service from an outside reference lab and then bills Medicare for that component, the practice may not mark up the reference lab’s charge. The technical component billed to Medicare may not exceed the amount the practice paid the reference lab. This rule is meaningful because many GI groups that describe themselves as having in-office pathology are actually sending specimens to a reference lab and billing for the technical component at a rate above what they paid – which is a specific billing compliance risk, not a gray area.
Meeting the Stark exception is the beginning of the analysis, not the end of it. The Anti-Kickback Statute runs a separate test, and the OIG has made clear that fair market value and Stark compliance do not satisfy it.
Anesthesia: Economics and Payer Risk
Anesthesia for endoscopy – typically delivered by a CRNA or anesthesiologist for patients requiring monitored anesthesia care (MAC) – represents a meaningful revenue line for GI practices and ASCs that capture it. The commercial payment for anesthesia can be substantial, and many GI-owned ASCs were built with anesthesia revenue as a significant component of the proforma.
That revenue line is under pressure from two directions. First, multiple Blue Cross plans have introduced anesthesia carve-out logic in 2024 and 2025 that bundles anesthesia payment into the facility rate or applies separate credentialing requirements that effectively exclude independently contracted CRNAs. The anesthesia arrangement you built into your proforma in 2022 should be stress-tested against your current commercial contracts today. Second, there is meaningful OIG scrutiny of anesthesia arrangements in which the GI practice receives compensation tied to the volume of anesthesia referrals made to a specific provider – a compensation structure that should be reviewed against both Stark and AKS standards.
The defensible anesthesia structure for a GI practice involves either employment of anesthesia personnel (cleanest from a regulatory standpoint), independent contracting on terms that do not tie compensation to referral volume from the practice, or a separate legal entity owned by the anesthesiologists themselves that provides services to the ASC under a facilities agreement at fair market value. Which structure is appropriate depends on your specific arrangement, state law, and corporate practice of medicine rules that vary significantly by jurisdiction.
Infusion Services: The Margin After the Drug Cost
Infusion services for biologic therapies used in IBD – agents like vedolizumab, infliximab and its biosimilars, and ustekinumab – have become a significant revenue center for GI practices with the infrastructure to deliver them. Medicare Part B pays for separately payable drugs and biologics at average sales price (ASP) plus 6 percent, with the administration separately reimbursed. Because biologics account for roughly 79 percent of Medicare Part B prescription drug spending, the aggregate payment is substantial.
The practice economics, however, depend on the margin after drug acquisition cost, infusion nursing time, chair time, pharmacy handling, and administration overhead. ASP is calculated quarterly and published by CMS; the actual acquisition cost for a given practice depends on group purchasing organization relationships, manufacturer contracts, and 340B eligibility if applicable. Practices eligible for 340B pricing may realize a materially different margin than those paying commercial drug prices. Practices that have not modeled this at the drug and payer level often overestimate the profitability of their infusion operation – or, occasionally, underestimate it.
Commercial payer coverage for infusion biologics varies by drug, by diagnosis, and by whether the payer requires step therapy or prior authorization. Authorization management for infusion biologics is resource-intensive: the average infusion authorization requires multiple contacts with the payer, documentation of prior therapy, and in many cases a peer-to-peer call. That labor cost belongs in the contribution margin model for each drug and payer, because it is not trivial and it is not the same across your payer mix.
From the Field
A four-physician GI practice in the Mid-South had been running an infusion suite for two years and believed it was profitable based on the gross drug payments appearing on their remittances. When our fractional CFO engagement built the actual contribution margin by drug and by payer, the picture was more complicated. Two biologic agents were being purchased at commercial prices above the ASP-plus-6 reimbursement rate for a subset of their commercial payer mix, producing a negative margin on those specific claims. Authorization denials for a third agent were running at a rate that consumed nearly 30 percent of the nursing time allocated to new starts, and that cost had never been assigned to the infusion line. The practice renegotiated its GPO pricing, terminated two drugs from the suite formulary where margins were consistently negative, and redeployed the nursing time to higher-margin agents. The suite turned modestly profitable within six months on roughly the same square footage and patient volume.
Advice vs. Execution on Ancillary Structure
Designing an ancillary arrangement requires legal counsel – not a consultant, not a fractional executive. The Stark and AKS analysis is legal work, and no one practicing healthcare consulting should be offering to substitute for it. What a consultant or fractional executive can do is model the economics, identify the questions that need to go to counsel, review the operational structure for efficiency, and monitor the financial performance once the arrangement is in place.
For practices that already have ancillary lines running, a financial review of each line’s actual contribution margin – by drug, by payer, by procedure category – is often the most valuable immediate investment. It is straightforward analysis that most practices have never done and that routinely finds both underperforming lines and structural inefficiencies that can be corrected without touching the legal architecture. If you have staff who can run that analysis and implement the operational changes it surfaces, consulting is likely the more economical scope. If the analysis would need to happen alongside ongoing operational management – particularly in a practice where the administrator is already at capacity – the fractional executive model handles both. As with any engagement of this kind, ask specifically what the work will look like in practice before you sign. The label tells you less than the scope.
Sources
- HHS Office of Inspector General, OIG Reiterates: Stark Compliance and Fair Market Value Alone Do Not Shield Against Anti-Kickback Statute Risk (April 2026) — https://www.healthlawdiagnosis.com/2026/04/oig-reiterates-a-core-message-stark-compliance-and-fair-market-value-alone-do-not-shield-against-anti-kickback-statute-risk/
- CMS, Medicare Part B Drug Average Sales Price – ASP Reporting and Payment — https://www.cms.gov/medicare/payment/part-b-drugs/asp-reporting
- MedPAC, Part B Drugs Payment Systems (Payment Basics, October 2024) — https://www.medpac.gov/wp-content/uploads/2024/10/MedPAC_Payment_Basics_24_PartB_FINAL_SEC.pdf
- American Gastroenterological Association, CMS Finalizes Payment Policies for 2026 (November 2025) — https://gastro.org/news/cms-finalizes-payment-policies-for-2026/
More in the Gastroenterology Series
- Endoscopy Center Economics: What GI Groups Need to Know Before They Build or Buy — the financial case for ASC ownership and the numbers to model before you commit.
- Screening Colonoscopy: Coverage Rules, Cost-Sharing Traps, and Scheduling Capacity — how coverage rules and scheduling design determine whether your colonoscopy capacity is actually being used.
- Advanced Practice Providers in Gastroenterology: Deploying NPs and PAs Without Losing Money — how to build an APP model in GI that actually covers its own cost and expands physician capacity.
- GI Payer Contracting and Evaluating Consolidation Offers: A Decision Framework for Independent Practices — how to negotiate GI payer contracts from a position of strength and evaluate consolidation offers with clear financial criteria.