When Lisa Robertson sought coronavirus testing for her college athlete daughter, a pediatrician recommended a small, independent pharmacy in Arlington, Virginia.
Preston’s Pharmacy charged $35 to take a nasal swab specimen and sent it off to a lab, Principle Diagnostics, for quick results. The lab billed her insurance company $864 – more than eight times than what the federal Centers for Medicare and Medicaid Services reimburses for COVID-19 tests.
“I was floored,” said Robertson.
Her daughter learned days later she did not have the coronavirus that causes COVID-19, and returned to her studies and college soccer team at Rice University. But Robertson was surprised her insurer, a Blue Cross and Blue Shield plan with robust benefits for federal employees and retirees, paid the full amount, via a check that she forwarded to the Bethlehem, Pennsylvania-based lab.
The lab did not respond to questions from USA TODAY about the charges.
“Why would it cost the lab $864, and then our insurance paid” the full amount, she said. “Is the lab taking advantage of a situation and not being regulated?”
It’s a question more are raising, with 85 million tests administered so far and Congressional mandates that require insurers pay the full cost of testing, no matter how much hospitals or labs choose to bill. As routine testing expands to workplaces, universities and professional sports leagues, labs may have found a lucrative niche amid the pandemic.
Erin Fuse-Brown, a Georgia State University College of Law associate law professor who has researched medical billing, said a key factor is that federal legislation requires insurers pay the full cost of COVID testing but does not limit the amount labs and hospitals can charge.
"It is not surprising that the price of tests are all over the map," Fuse-Brown said. "This requirement can create incentives for labs who are out-of-network to stay out-of-network and to charge higher prices for COVID tests because insurers are required to pay for them."
In July, the House Energy and Commerce Committee sent inquiries to 10 laboratories and hospitals about COVID test prices that reportedly ranged from $300 to $6,000. The committee's letters described the charges as "unconscionable and clearly excessive," and questioned whether the labs complied with the Families First and CARES acts, both intended to ensure widespread testing at little to no cost for patients.
A doctor who worked for a chain of free-standing emergency rooms in Texas went to an Austin location to get a COVID-19 antibody test. His insurance plan was billed $10,984 for the test and paid the entire amount, prompting the doctor to quit the chain, ProPublica reported.
Under the federal legislation, insurance companies must cover COVID-19 testing at no cost to the patient. The legislation also requires providers post on a website the prices for COVID testing, but the Energy and Commerce committee noted some labs failed to meet this requirement.
'States duking it out for supply': Lack of federal plan leads to coronavirus testing delaysA separate analysis by the nonprofit and nonpartisan Kaiser Family Foundation found nearly one in four hospital websites did not publicly post prices. Of the hospitals that did, Kaiser found some prices as high as $850 for a single test – not including extra fees a consumer might be assessed, such as the cost of a doctor’s visit, facility fee or specimen collection. The median price was $127, but about one in five hospitals charges more than $200 per diagnostic test.
A survey conducted by the industry group America’s Health Insurance Plans found hospitals or labs that did not contract with insurance plans tended to charge the most. About 1 in 10 of these out-of-network providers charged an average $390 for a COVID test.
By comparison, Medicare, the government insurance program for older Americans, pays labs $100 for each COVID test processed by a “high-throughput” machine designed to increase capacity and deliver faster results. For other COVID tests run on different instruments, Medicare paid about $51 per test as of April, the agency said.
“It does show there is price gouging occurring during this pandemic that we feel is not appropriate,” said Jeanette Thornton, AHIP’s senior vice president of product, employer and commercial policy.
Thornton and others explained when such excessive prices are billed, it ultimately costs employers, consumers and taxpayers more because insurers raise premiums to keep pace with rising costs.
"We wanted to get to the bottom of what these tests would be costing the health system as a whole," she said. "All of the health care costs are reflected in premiums for health insurance."
More on testing: Delays force labs to prioritize COVID-19 tests for some, not others
'It would be a nightmare'
Soupergirl, a Washington D.C.-based company that make fresh soup, tests its 25 employees every week.
Founder Sara Polon began testing employees to keep them and the community safe. If an employee had the virus but no symptoms, such routine testing could prevent spread to other workers, family or community members.
But Soupergirl suspended the employee testing briefly in July when it took a private lab more than two weeks to return test results – too long to identify an employee who might unwittingly spread the virus to others. That never happened, and because turnaround times have since improved, Soupergirl resumed routinely testing employees.
Now, Polon is worried about the financial risk of ongoing testing. The company pays $650 to $800 for a doctor to administer tests, which are sent to a lab. She has not yet received a bill from a lab for this routine testing.
If she does get a bill directly from a lab or if her company's insurer does not pay for the entire cost, it would be financially devastating for a small business trying to sustain operations during the pandemic.
"I'm petrified," Polon said. "It would probably be $20,000 minimum, which would hit at some point during the second wave. It would be a nightmare."
For Robertson, of McLean, Virginia, the direct cost of COVID testing has not immediately harmed her family's finances. Her insurer sent her a check down to the penny for the amount the lab charged. Even though she thought the charges were excessive, she forwarded the check to the lab.
Robertson's main concern is pricey testing charged to consumers and insurers will ultimately lead to higher health costs.
"That’s what I don’t like," Robertson said. "Our policies are going to go up."
Do you have a bill from a COVID test that you are willing to share? Contact Ken Alltucker at [email protected]
'Really astonishing': Average cost of hospital ER visit surges 176% in a decade, report says