Laura Buckman for KHN
When COVID-19 struck last year, Travis Warner’s company was busier than ever. He’s installing internet and video systems in Texas, and with people suddenly working from home, service calls pile up.
He and his staff took precautions such as wearing masks and physical distancing. Visiting customers every day, however, meant a high risk of exposure to the coronavirus.
“It was like dodging bullets every week,” says Warner.
In June 2020, one employee tested positive. That sent Warner and his wife on their own hunt for a test.
Due to the limited availability of testing at the time, they drove 30 minutes from their Dallas home to a detached emergency room in Lewisville, Texas. They received PCR diagnostic tests for the coronavirus as well as rapid antigen tests.
When all of their results were negative, it was a huge relief, says Warner. He went back to work eagerly.
Then came the bill.
The patient: Travis Warner, 36, is self-employed and purchased his health plan from Molina Healthcare through HealthCare.gov.
Medical service: Two “COVID tests” for the coronavirus – a diagnostic PCR test, which usually takes a few days and is fairly accurate, and a rapid antigen test, which is less accurate but gives results in minutes.
Entire invoice: $ 56,384, including $ 54,000 for the PCR test and the remainder for the antigen test and an ER setup fee. Molina’s negotiated price for both tests and the setup fee totaled $ 16,915.20, which the insurer paid in full.
Service provider: SignatureCare Emergency Center in Lewisville, one of more than a dozen freestanding emergency rooms the company owns across Texas.
What gives: During the COVID-19 pandemic, there were many stories of shockingly high prices for coronavirus tests. A current report by an insurance association states that “price gouging is still a widespread problem with certain providers”. Warner’s $ 54,000 PCR bill was “astronomical” and “egregious,” according to the health policymakers we spoke to.
But it’s perfectly legal. For coronavirus testing – as is the case with much in American healthcare – there is no upper limit on the fees charged by providers, says Loren Adler, deputy director of the USC-Brookings Schaeffer Initiative for Health Policy.
However, testing for the coronavirus was in a special category. When the pandemic broke out, lawmakers feared people might avoid necessary tests for fear of the cost. So they passed laws that made insurers pay for these tests – with no co-payments or co-payments for the patient.
For providers within the network, insurers can negotiate prices for the tests, and for providers outside of the network they generally have to pay the price that the providers publicly advertise on their websites. The detached emergency room was off the network for Warner’s plan.
While the directive should help patients, health policy analysts say, it has inadvertently given health care providers the leeway to charge arbitrary, sometimes absurd, prices, knowing insurers have to pay and unbilled patients are unlikely to complain.
“People will demand what they think they can get away with,” said Niall Brennan, president and CEO of the Health Care Cost Institute, a nonprofit that researches health prices. “Even a well-intentioned provision like this can be hijacked for nefarious purposes by certain unscrupulous vendors.”
A report by the Kaiser Family Foundation earlier this year found hospital fees for coronavirus tests ranged from $ 20 to $ 1,419 – excluding doctor or facility fees, which can often be higher than the cost of the tests themselves. About half that Trial fees were under $ 200, the report said, but 1 in 5 was more than $ 300.
“We observed a wide range of COVID-19 test prices, even within the same hospital system,” the authors wrote.
Realistically, the cost of such a test should be in the double-digit range, says Brennan. “Low three-digit numbers when we’re generous.”
Medicare pays $ 100 for the test, and home tests sell for just $ 24 for an antigen test or $ 119 for a PCR test.
Warner’s fees were fully covered by his insurance.
But the insurance premiums reflect how much is paid to the providers. “If the insurance company pays astronomical sums for your care, that in turn means that you are paying higher premiums,” says Adler.
Taxpayers who subsidize marketplace insurance are also more heavily burdened when their premiums rise. Even people who have employer-sponsored health insurance can feel the pain. Research shows that every $ 1 increase in an employer’s health care bills is associated with a 52-cent cut in a worker’s total compensation.
Even before the pandemic, large price differences for common procedures such as caesarean sections and blood tests drove up health care costs, says Brennan. These discrepancies “occur millions of times a day every day”.
Resolution: When Warner saw that his insurance company had paid the bill, the first thing he thought was, “At least I’m not liable for anything.”
But the absurdity of the $ 54,000 charge gnawed at him. His wife, who received the same tests in the same location on the same day, was billed $ 2,000. She has a separate insurance policy that covered the damage for less than $ 1,000.
Warner called his insurer to see if anyone could explain the charges. After a phone call with the emergency room and the emergency room billing company and several months of waiting, Warner received another letter from his insurer. It was said that the insurer had since examined the claim and withdrew most of the money originally paid to the emergency room.
In a written statement, a Molina Healthcare spokesperson told us, “This matter was a vendor billing error that Molina has identified and corrected.”
SignatureCare Emergency Centers, which collected the $ 54,000 fee, said they would not comment on a particular patient’s bill. However, a written statement states that the billing error rate is less than 2% and that there is a “robust audit process” to identify errors. At the height of the pandemic, SignatureCare’s ERs faced “unprecedented demands” and processed thousands of records every day, the company said.
SignatureCare’s website now lists the $ 175 coronavirus testing fee.
Take away: Under the laws passed by Congress, tests for the coronavirus should be free for consumers during the public health emergency (currently extended to mid-October and expected to be extended for another 90 days). Warner did his insurer a huge favor by looking at his bill even though he owed nothing.
Insurers should have systems that identify billing errors and prevent overpayments. This includes approval requirements prior to the provision of services and audits after the submission of claims.
But “it’s a question of how well they work,” says Adler. “In this case, it’s luck [Warner] noticed. “
At least one estimate is that 3% to 10% of US health care spending is spent on overpayments, including cases of fraud, waste, and abuse.
Unfortunately, this means that it is often up to the patient to keep the fees at least a little more reasonable.
You should always read your bill carefully, experts say. If the cost seems unreasonable, call your insurer and ask them to double-check the cost and explain the cost to you.
Experts agree that shouldn’t be your job, but less overpayments will save you and others in the American healthcare system money in the long run.
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