When COVID Testing Costs Go Horribly Wrong

As if we don’t have enough to worry about with the pandemic, now there testing costs to worry about. On some occasions, providers have charged outrageous prices for what should have been a routine COVID-19 test, often based on the claim that the consumer is “out of network.” A big part of the problem is lack of transparency in medical costs across the United States, along with the convoluted negotiations each insurance company undertakes with medical facilities to reduce prices.

As reported by ProPublica, back in July a Houston woman, Rachel de Cordova, was charged close to $2,500 for a COVID-19 rapid-response drive-through test, which she took from her car in the parking lot of a free-standing emergency room clinic, SignatureCare. The cost for an out-of-pocket test was supposedly $175, but de Cordova chose to go through her insurance.  When she read the fine print on the facility paperwork, she discovered that the care would be considered out of network and that insured patients were responsible for all charges.

The company did not specify exactly what the final charges would be, but de Cordova she signed the papers. After reading them again, de Cordova grew wary. She attempted simply to pay the out-of-pocket fee and was told that would be fraud, because she had insurance. She left without getting the results of her test.

De Cordova, who is a lawyer, and her husband Hayan Charara decided to look into what happens to people who sign the papers—and discovered that they could do that from their own family’s experience. In June, Charara had taken their son to the same clinic for a coronavirus test and had signed the papers to get the test. Charara and de Cordova discovered that their insurance company, Employees Retirement System of Texas, was charged $2,479 for the test, even though their son was tested from the car in a 5-minute interaction with no physical exam.

According to nonprofit FAIR Health, the test billed by SignatureCare would cost $23 in network in Utah and $75 in Wisconsin. But rates in Texas for out-of-network bills are often extremely high. In 2019, Texas lawmakers voted against “balance” or “surprise” billing, where patients in state-regulated insurance plans get charged for billed items that are not covered by their policy. However, notes Blake Hutson, associate state director for AARP Texas, consumers still have to pay their deductibles. If medical facilities repeatedly overcharge, the insurance company will raise premiums.

Medical insurance is one of the only industries where the providers don’t have to give a full accounting of costs up front and where providers can raise rates on people who haven’t done anything to merit a loss of coverage or an increase in price.

In an Austin, Texas, case covered by Medscape and the Texas Tribune, Dr. Zachary Sussman’s insurance company was charged $10,984 after he got a COVID-19 antibody test at Physicians Premier ER. Dr. Sussman, a pathologist, worked for the free-standing emergency room chain and mistakenly thought he’d get the test for free. Instead, his insurance company was billed and paid the whole amount. Disgusted, Dr. Sussman left his job.

Dr. Sussman was working under contract in Texas at four of the Physicians Premier locations, overseeing antibody tests for COVID-19. He had taken the job temporarily in anticipation of transferring to a hospital in New Mexico, now his home. Dr. Sussman wanted a coronavirus test before some travel he had planned, so he visited a branch of Physicians Premier to get an antibody test. He did not work at the branch he visited.

According to Dr. Sussman, the material cost for the rapid-result test is about $8. He thought his company would comp the test, since he was an employee, although staff members took his insurance details. They promised he would not be billed. He had a short-term plan through Golden Rule Insurance Company, owned by UnitedHealthcare, the largest insurer in the country. The insurance was not provided through his work.

During the 30-minute test visit, Dr. Sussman’s vitals were checked but he got no physical exam. Later, Golden Rule, sent an explanation of benefits, which included $2,100 for a physician visit. Physicians Premier bills insurance but considers itself out of network. Golden Rule paid the whole bill.

Then a second explanation of benefits arrived from the insurance company, for $8,884 in charges for “USA Emergency,” which the insurance company again paid. USA Emergency Centers licenses the Physician Premier name for some locations. The cumulative bill of nearly $11,000 left Dr. Sussman so shaken that he resigned, because he found the company’s billing practices unethical and possibly fraudulent. He is appalled that his insurance company did not renegotiate the bill rather than paying the whole thing.

Physicians’ Premier defends its billing practices. But Dr. Sussman was charged for services he never got, like emergency care and a physician’s visit. He was charged for a nasal swab, which he never had, and was charged $1,600 total for the antibody test he actually got, which has a list price of $75 from Physician’s Premier. The costs of an identical care from Medicare is $42.

Dr Sussman made a follow-up call to his insurance company’s fraud investigators, but the company did not pursue his claim at that time. UnitedHealthcare now claims they are investigating his case. Other people in Texas who might have been fraudulently charged for services related to COVID-19 during the pandemic should consider contacting the attorney general’s office; the state has a consumer protection law to deter medical exploitation during a disaster.

According to Vivian Ho, an economist at Rice University, Texas is home to many free-standing emergency rooms set up to look like low-priced walk-in clinics. While they hope to cater specifically to people who have insurance, they don’t negotiate rates with the insurance companies so that they can charge out-of-network rates.

The CARES Act isn’t helping the situation. Under the act, for out-of-network tests, insurers pay the cash price that a facility posts on its website. But many facilities add on other costs beyond the actual test price. Insurers often end up paying those costs as well, which leads to higher insurance premiums. And while it’s illegal for medical facilities to charge for services they did not provide, insurance companies often do little to investigate or to deter fraudulent charges. Insurance companies not only don’t have the time and manpower to fight fraud, they also don’t want to be seen as whistle blowers by legitimate facilities and thus lose access for their clients.

Disclaimer: This article does not provide medical advice. Do not take action based solely on this article and always consult with an appropriate healthcare professional. This article is purely for informational purposes.

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