A review of digoxin assay utilization concurrent with patient hospitalization was conducted at the University of Texas Medical Branch. An interdepartmental committee of clinicians adapted audit criteria for the collection and use of digoxin assays. This included rational indications, correct performance (i.e., collection and processing of serum sample) and appropriate dose adjustment. The charts of all patients receiving digoxin were examined daily, whether or not the physician had ordered a drug assay. Contributory data were collected and analyzed, including serum electrolyte concentrations, arterial blood gases, renal function tests, vital signs, physician assessments, and other information relating to pertinent and concomitant diseases or drug therapy. The 2-month review included 104 hospital inpatients who received 245 evaluations. Only 38.4% of the evaluations were determined to be compliant with all criteria. When the audit categories of rational indication, correct performance, and appropriate dosage adjustment were evaluated independently, compliance rates were 66%, 73% and 86%, respectively. In 108 cases (52%), the physicians provided inadequate instructions in their request for the digoxin assay to insure proper collection time by the phlebotomist. Approximately 94% of all assay results were verbally communicated to the physician or returned to the patients' charts for use in patient management within a minimum of 24 hours. Hospital laboratory charges for unnecessary, incorrectly performed, or inappropriately used digoxin assays were estimated to exceed $100,900 annually. The audit was used to demonstrate the need for changes in hospital procedures and house staff training. A collaborative pharmacokinetics service was organized with reimbursement accomplished through the physician billing charge.