SAN DIEGO (KGTV) – Health experts say some companies are charging excessive prices for COVID-19 testing, all because of a loophole in federal law.
A provision in the CARES law passed last year allows COVID testing companies to name the price they want and requires private health insurance companies to pay the full amount.
In lawsuits, health insurers claim the practice has led to “price hikes” and “catastrophic profits” from some testing companies. Regulators say inflated test prices could potentially be passed on to consumers through higher insurance premiums.
In a pharmacy, a quick COVID test costs about $ 20. But a multi-state testing company called GS Labs lists its price at $ 380 for such a test.
In a survey earlier this year, the Kaiser Family Foundation found many more examples.
“When we looked at the two largest hospitals and [Washington] DC, we have found that prices for COVID-19 diagnostic tests can range from $ 40 to $ 1,400, ”said Krutika Amin, KFF health policy expert.
As long as a COVID test is “medically necessary,” patients don’t have to foot the bill.
The CARES law requires insurance companies to cover the full cost of COVID testing, even if the person does not have symptoms or a doctor’s referral, Amin said. There are other programs to cover the costs of testing for uninsured people.
Some providers may bill the patient in advance, but consumers can submit the bill to insurance later for reimbursement, Amin said. There are only limited exceptions. Insurers are not responsible for covering return-to-work testing, so patients may take responsibility.
“In the interest of public health, Congress wanted to make sure that COVID-19 tests were available without any barriers for people, and therefore they needed insurance to cover the full cost of the prices of the drugs. COVID-19 testing, ”Amin said.
However, the federal government has not set limits on how much private insurance companies could have to pay for COVID testing, Amin said. This contrasts with the way the government has handled payments for COVID vaccines, where regulators set limits on what they consider reasonable fees.
Congress expected private health insurers and testing companies to negotiate COVID testing rates in good faith. But lawmakers gave the testing companies the ultimate trump card: In the event the two parties couldn’t come to an agreement, insurance companies were required to pay the cash price the testing provider quoted online.
This gives testing companies little incentive to negotiate, Amin said.
In a lawsuit, Kansas City’s Blue Cross and Blue Shield accused testing provider GS Labs of refusing to negotiate and instead displaying “fictitious spot prices” that were “excessive” and “objectively unreasonable.”
GS Labs says it follows the law. The company claims its pricing is justified because of its level of customer service.
Ultimately, customers who get these tests aren’t paying those high prices now, but regulators warn that could change in the future.
“If these astronomical costs billed by unscrupulous providers are borne by health plans and insurers without compensation, consumers will ultimately pay more for their health care as health insurance costs increase,” wrote Justin McFarland , general counsel for the Kansas Insurance Department.
This week, a bipartisan group of lawmakers introduced a bill designed to curb surprise billing for COVID tests and fight price hikes.
The bill would require the Department of Health and Human Services to survey test companies and issue a public report “outlining which vendors charge prices that significantly exceed the average spot price.”
Another bill proposed in July would cap the price of coronavirus tests at twice the reimbursement rate set by Medicare.