Covid Rapid Test Prices: How a Law Allows Labs to Charge Any Price


A rapid Covid test at the pharmacy usually costs less than $20.

Across the country, more than a dozen test sites owned by the startup GS Labs regularly bill $380.

There’s a reason they can. When Congress tried to ensure that Americans didn’t have to pay for coronavirus testing, it required insurers to pay certain labs for whatever “cash price” they listed online for the tests, with no limit to what that could be.

GS Labs’ high prices and increased presence – it has conducted half a million rapid tests since the start of the pandemic and is still running thousands a day – show how the government’s long-standing reluctance to price healthcare has thwarted its attempt to protect consumers. As a result, Americans may eventually pay for some of the cost of expensive coronavirus testing in the form of higher insurance premiums.

Many health insurers refused to pay GS Labs’ fees, with some claiming the lab had raised prices during a public health crisis. Missouri has a Blue Cross plan to sue GS Labs is seeking a $10.9 million judgment that will void unpaid claims.

In court last month, the insurer claimed the charges were “catastrophic profiteering” and a violation of public order.

Omaha-based GS Labs claims the opposite: it has public policy on its side and CARE Act “Insurers are obligated to pay cash, unless they reach an agreed-upon rate,” said Christopher Erickson, partner at GS Labs.

The requirement that insurers pay the upfront price only applies to non-network labs, ie those that have not negotiated a price with the insurer. There are signs that other labs are behaving like GS Labs: A study Published this summer by America’s Health Insurance Plans, the trade association representing insurers, it found that the share of coronavirus testing at non-network facilities rose from 21 percent to 27 percent between April 2020 and March 2021.

He found the average price of a coronavirus test at an in-network facility was $130; this is a figure that includes both rapid tests and the more widely used and more expensive PCR tests. About half of the out-of-network providers charge at least $50 more than that.

$380 cash price sent On the GS Labs website. In legal documents, he said the rapid test paid for “about $20” for him. Mr Erickson says the high price reflects the “premium service” they provide to patients and the $37m initial costs associated with setting up their lab networks in less than a year.

“You can book 15 minutes with us on any given day and get your results in 15 to 20 minutes,” said Mr Erickson, pointing to the scarcity of tests in many pharmacies. “We have a nursing helpline where you can comment on your results. Our pricing is one of the most expensive in the country because we have the best service in the country.”

Health policy experts who’ve studied GS Labs prices said it’s hard to understand why its tests should have cost eight times the $41 Medicare price, despite the company’s investment in the service.

“It’s not like neurosurgery, where you might want to pay a premium for someone with years of experience,” said Sabrina Corlette, a research professor at Georgetown who studies coronavirus testing prices.

While she felt her price was extremely high, Ms. Corlette and other experts said GS Labs had strong legal grounds to continue charging her because of the way Congress wrote the CARES Act. “Whatever the price the lab puts on the public website, that’s what has to be paid,” he said. “I don’t read a lot of wiggle room in it.”

GS Labs is owned by City+Ventures, a real estate and investment firm. It started its first test site last October and at its peak operated at 30 locations across the country.

When it started ramping up testing last year, it asked to become an in-network provider, offering what it describes as “significant discounts” in exchange for reliable and fast payments. The company declined to specify the exact size of its discount, but said insurers often reject their offers.

GS Labs said it thinks insurers are hostile to its new operation. Some sent benefits disclosure documents to their members showing that the request was denied and the patient may have to pay the full amount.

GS Labs said it does not charge patients directly in violation of federal law, and that these mails are a tactic that should be turned down. against the business of their customers.

“They’re trying to paint us in a bad light when they’re not violators of federal law,” said Kirk Thompson, another GS Labs partner. “Insurers have made the decision to ignore their obligations or justify non-compliance with the CARES Act.”

Insurers define interactions differently. They say they are doing everything they can within the limits of federal law to protect patients from unnecessarily high fees that will ultimately increase premiums.

The UPMC Health Plan in Pittsburgh first became aware of GS Labs when it saw an unusual pattern in its claims: The vast majority included a rapid antigen test as well as a Covid antibody test. He said that 91 percent of all claims for a health plan from any lab with this combination of billing codes came from GS Labs.

“There is little reason to order both of these tests on the same day,” said Stephen Perkins, chief medical officer of the health plan. “They serve very different purposes and will not be ordered systematically as a result of suspected Covid exposure.”

The health plan saw this as proof that GS Labs is playing the CARES Law: Insurers need to fully cover antigen and antibody testing. “The CARES Act regulates what we can and cannot do, and we cannot refuse to pay double bills,” he said.

GS Labs says it offers patients a “menu of tests” and the patient chooses which ones to take.

But the UPMC health plan has decided to challenge GS Labs pricing in other ways. At one point, the plan’s legal staff noticed that the lab was advertising a 70 percent coupon offered to cash-paying patients, which would lower the price to $114. The coupon has since been removed from the GS Labs website.

“We told GS Labs we believe this is the cash price, and that’s the amount we’re paying them right now,” said Sheryl Kashuba, the plan’s chief legal officer.

City+Ventures general counsel Evan White said his company is continuing to evaluate “next steps” regarding its health plan. “We are in no way satisfied with the rates they are self-imposing,” he said.

What actually counts as GS Labs’ cash price – and whether insurers will eventually have to pay it – can be decided in Congress or in the courts.

In July, Blue Cross Blue Shield Kansas City argued in a lawsuit against GS Labs that the discounted price sometimes offered to patients who do the testing themselves—the $114 fee that UPMC Health Plan also discovered—is the company’s real cash price.

In the health plan’s legal brief, he said, “GS Labs knowingly and willfully engaged in a scheme or ruse to defraud health insurers and their plans by posting a false cash price,” and then the group demanded that health plans and insurers pay the same false cash prices. ”

GS Labs said that the fact that it has offered discounts to some patients does not mean that insurers are “authorized to pay only a small fraction of the published cash price.” He opposed the Blue Cross plan, claiming that the plan should pay approximately $10 million for 34,621 unpaid claims.

In 2020, in the midst of a health crisis, Congress, which quickly passed legislation and decided on easy-to-implement policies, did not use the formula it had recently adopted. legislate against surprise billing: obliges insurance companies and medical providers to resolve price differences through an outside arbitrator.

Minnesota Democratic Senator Tina Smith proposed a bill in July that would make coronavirus test reimbursement double the Medicare reimbursement rate. For quick tests this would be around $80.

Senator Smith, introducing his law, The Times reported In high-priced testing as proof why such a change is needed.

“If these labs are going to take advantage of this and the market is going to charge no matter what, that pushes us to put a cap on the cash price to stop the price gouging that hurts consumers,” he said in an interview.

It is unclear whether this legislation will be part of the reconciliation package Congress is discussing. There may be hesitation to act: Legislators are grappling with larger healthcare offerings and can expect the test fees issue to resolve itself once the pandemic is over.

“Everyone continues to think we’re almost done, and this provision of the CARES Act only applies as long as the public health emergency persists,” said Loren Adler, deputy director of the USC-Brookings Schaeffer Health Policy Initiative.

GS Labs plans to continue expanding as demand for rapid testing remains strong. He doesn’t see the Biden administration’s plan to conduct widespread rapid testing at home as an obstacle to his growth. It currently operates 16 test sites and plans to open two more soon. Once these open, the cash price will remain the same.

“We’re very reasonable people, but our cash price is a real cash price for any insurer who doesn’t want to negotiate,” said Mr Thompson of GS Labs.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *