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The audit objective was to (1) determine whether Atlantic Urological Associates, P.A. (the Practice) claimed reimbursement for pathology laboratory services in accordance with Medicare Part B requirements during calendar year 2004 and (2) analyze the Practice's utilization patterns for pathology services. The Practice’s claims for pathology laboratory services generally complied with Medicare Part B requirements. We noted an increase in the number of pathology services requested and performed after the Practice contracted with a laboratory management company, which increased costs to the Medicare program. However, the Practice explained that the increased number of tissue examination requests were an attempt to more fully meet the needs of its patients. The audit report did not contain any recommendations for the Practice.