Most Coronavirus Tests Cost About $100. Why Did One Cost $2,315?

By Consumers For Quality Care, on June 23, 2020

Most Coronavirus Tests Cost About $100. Why Did One Cost $2,315?

A New York Times article explains how some COVID-19 testing centers are taking advantage of the health care system to charge high prices for virus testing.

Gibson Diagnostic Labs, a medical clinic in suburban Dallas, charged as much as $2,315 for individuals coronavirus tests. In some cases, the price rose to almost $7,000 – which the lab says was a mistake.

How can a simple coronavirus test cost $100 in one lab and 2,200 percent more in another? It comes back to a fundamental fact about the American health care system: The government does not regulate health care prices.

Health policy experts say this kind of behavior is not uncommon in the United States and believe two things will come of it: higher overall prices and bigger price variations.

While the federal government is currently helping to fund the costs associated with COVID-19, Americans will likely face higher insurance premiums down the road. Even now, patients are forced to pay for tests that check for respiratory diseases outside of coronavirus, like the flu and pneumonia, as doctors tack them on to coronavirus testing.

A study from the Kaiser Foundation shows that most Americans worry they won’t be able to cover the costs of getting tested for coronavirus – which can lead to some patients avoiding testing all together.

Experts also worry about the practice called “balance billing,” which is when an insurer pays part of the bill for an out-of-network patient and the doctor then bills the patient for the difference. Balance billing may unintentionally encourage providers to set high prices knowing that insurers are required to pay.

“If you are an out-of-network lab, you can name your price,” said Loren Adler, an associate director at the U.S.C.-Brookings Schaeffer Initiative for Health Policy. “I could say it’s $50,000, and you are required to pay me that amount.”

While recently passed coronavirus aid legislation currently protects most patients from big testing bills and provides them access to affordable testing, patients in some states like Texas, Oklahoma, and New Jersey have had to contend with providers that set their prices significantly higher – the costs of some tests going as high as $990.

Multiple insurers identified Texas as the state where they’ve received the highest proportion of expensive tests. Blue Cross and Blue Shield of Texas has received more than 600 out-of-network bills for coronavirus tests that are over $500, with an average charge of $1,114.

After inquiries from The New York Times, Gibson Diagnostic Labs is not just reversing its high charges, it will also be lowering the price of individual coronavirus tests to $300.

Frustration within the industry has led many to call on Congress to finally address the long-standing issues posed by balance billing, and some Members say they are looking into the issue.