Hospital bills student $2,000 for lab test, insurer pays $375

I’ve written about so-called ‘chargemaster’ pricing from hospitals before, and how it typically hits the self-pay uninsured the hardest. People with high-deductible health insurance can also be victimized by ‘chargemaster’ policies, as this family found out when trying to find a facility for their daughter’s tonsillectomy. Getting real prices from a hospital can be a maddening process!

Consider the experience of David Marcovitz, a second-year med student at the time of his introduction to the world of hospital pricing, as described at the blog Costs of Care.

A Routine Denial

When I was a second year medical student, I gave blood at a Red Cross drive and noticed a week later that I had a hard and slightly tender blue spot on my left forearm arm where they had drawn blood.  I described it to my PCP [primary care physician] through our online portal… He called me an hour later to suggest I start taking aspirin and see him the next day… 

I went to see my PCP at student health the next day, and after taking a history and examining me, he decided to order a hypercoaguability panel, a set of lab tests used to diagnose a small number of inherited and acquired conditions that put one at increased risk for having blood clots.  He called me when the results were in to tell me I was “heterozygous”… for a fairly common mutation called Factor V Leiden…

…things started to get interesting when I received a bill from our student health insurance company stating that I owed $2000 for the genetic test used to diagnose my Factor V Leiden.  I called up the administrator… and I told them that according to the benefits guide, diagnostic blood tests were covered.  They told me that the test for Factor V Leiden was a “genetic screen” which they did not cover… despite my sticker shock, the claims agent didn’t seem to share in my alarm.  I realized quickly in talking to him that denying payment for this test was a very routine thing and that he had nothing further to say about it.  He told me I would simply need to submit an appeal and include a letter from my PCP.

The appeal was submitted and within a few months, [I] received a new and adjusted bill from the administrator asking only that I pay the usual 10% of the cost for the test – my appeal had been a success.  But what struck me was that I wasn’t asked to pay ten percent of $2000, but rather ten percent of $375.  The hospital wanted $2000 from me for the test, but they only wanted $375 from the insurance company…

The blog post doesn’t directly say it, but it seems that Mr. Marcovitz had his blood tests done by a hospital. Self-pay patients should take note – unless absolutely necessary, under no circumstances should you have any diagnostic testing or screening done at a hospital!

There are numerous alternatives available in most communities, many of whom will give real prices to the uninsured and those with high-deductible health insurance. A few companies offering services nationally that I found explicitly promoting their self-pay patient pricing or discounts include First Choice Labs USAEconoLab$, True Health Labs, and Some of these companies appear to simply repackage lab tests from other companies that would otherwise charge self-pay patients the ‘full’ price.

There are also local and regional lab testing facilities that cater to self-pay patients. PeaceHealth Labs, serving Oregon, Washington, and Alaska is headquartered in Eugene, Oregon (Go Ducks!) and offers self-pay patients discounts on lab testing services, for example.

Some of these sites don’t provide clear pricing on their web site, although they do say they provide prices to patients over the phone (although often only after they’ve received a requisition request, similar to a prescription but for diagnostic testing). EconoLabS, True Health Labs, and all offer prices online.

Lab testing is a vital part of modern healthcare, and can be a valuable tool in helping to diagnose many conditions and illnesses. But they can also be costly, especially if patients don’t pay attention to where their tests are being done. This can even be a problem for those with ‘comprehensive’ insurance, such as Mr. Marcovitz, when their insurer decides after the test is performed that they won’t cover a certain procedure. His story turned out OK, but most self-pay patients would likely have been stuck with a $2,000 bill for a test that they should only have paid $375.

In some cases, having a lab test done by a hospital is simply unavoidable. But if at all possible, don’t have your lab test done at a hospital, go to one of the many independent lab companies that give real prices for self-pay patients.

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8 Responses to Hospital bills student $2,000 for lab test, insurer pays $375

  1. Eric says:

    What’s so confusing about our healthcare market these days is that while some providers try to rip-off cash-paying customers as described, other times we get ripped off the other way around. Often, the “negotiated” rate with insurance companies is many times the real market rate for a service. I recently was asked to get a CT Scan by my PCP and was sent to an “in network” imaging center. They informed me that their “contract” price with my insurance company for the CT Scan was $2700. But, their cash price was just $400. Since I have a large deductible, I would have been responsible for the entire $2700. So, I chose the $400 which meant the procedure wouldn’t even apply to my deductible. I complained to my insurance company accusing them of padding their rates. They replied with circular logic that made no sense to me, but basically said my provider must be shady since the rate they were offering was so much lower to the market rate. Luckily, I read your blog so I only had to point them to to show them that the market rate was much closer to the $400 than to the $2700. Thanks for equipping us Sean!

    • seandparnell says:

      Thanks for sharing your experience, and you’re welcome! Yeah, the whole healthcare pricing issue is a mess. Most insurers don’t seem to have a better grasp on heathcare prices than anyone else, which is kind of surprising.

  2. Eric says:

    OK, I had to add another comment here. I have often thought that it might be helpful t have some sort of law which would limit the variance of what an individual medical provider charges (ie. They cannot charge more than say 30% more than their lowest paying customer is charged). Let them charge whatever they want. But, require that they don’t overcharge Peter to pay for Paul’s very low rate. Has anyone ever tried this approach? Why is nobody talking about this?

  3. c cummings says:

    Affordable lab test. Test yourself anytime you want to. No prescription needed!
    Currently serving locations in Florida.

  4. Pingback: Tips on saving money when paying for health care | The Self-Pay Patient

  5. ST says:

    If you are looking for a nice deal in Ohio you can take a look at
    Looks like nice pricing and a VIP type service to help you navigate through the healthcare swamp!

  6. COBRA/health care insurance is why people SHOULDNT quit their jobs, but try and negotiate a severance instead.

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