June 17, 2020

Federal law requires health insurers to cover the costs of enrollees' coronavirus tests, but some insurers are reporting that those costs vary among states, labs, and providers—with charges ranging from as little as $23 to as much as $2,315.

The 3 biggest questions about Covid-19 testing, answered

Costs of coronavirus test reach more than $1,000 in some states

FDA has approved more than 90 manufacturers' tests for the new coronavirus, and health insurers are reporting that the amount they are charged for those tests can vary widely.

According to the New York Times' "The Upshot," most providers charge insurers between $50 and $200 for the tests, and an analysis of Castlight Health data on almost 30,000 bills for coronavirus tests found that 87% of the tests' costs were listed as $100 or less.

Ruben Argueta—director of investor relations at Quidel, which produces approved tests for the new coronavirus—told USA Today that one testing kit from the company, which contains about 25 tests, costs "about $23 per test to the end user, in this case our health care providers."

LabCorp, one of the largest diagnostic testing companies in the United States, has said it bills insurers $100 for coronavirus tests, which is the reimbursement amount that CMS has set for coronavirus tests covered by Medicare.

But Angie Meoli, an SVP at Aetna, said insurers have "seen a small number of laboratories that are charging egregious prices for Covid-19 tests."

For instance, some insurers reported that they had paid Gibson Diagnostic Labs up to $2,315 for individual coronavirus tests before an insurance plan flagged the high charge in April, "The Upshot" reports. According to Gibson, the high charge was due to "human error" within the company's billing department. The company then reduced its charge for the tests to $500, which still is 500% higher than the amount paid by Medicare, "The Upshot" reports.

Insurers also have reported that they tend to see their largest proportion of high charges for coronavirus tests from entities in Texas, with charges from ranging from $27 to the $2,315 that Gibson had previously billed, according to "The Upshot." For instance, Blue Cross and Blue Shield of Texas has gotten more than 600 bills listing out-of-network charges for coronavirus tests as more than $500, with the average costs of those charges at $1,114, "The Upshot" reports. In addition, insurers have flagged that a chain of EDs in Oklahoma and Texas have charged them $500 to $990 for coronavirus tests, according to "The Upshot."

Why coronavirus test prices vary

"The Upshot" reports that providers and labs billing higher amounts for coronavirus tests don't necessarily have better technologies or tests than those billing less, so it's not likely differences in quality explain why the charges vary. Instead, "The Upshot" reports that it appears as though some labs and providers are "taking advantage" of federal requirements that insurers pay for the costs of the tests by inflating their charges, because they know they'll be reimbursed for the costs.

According to "The Upshot," labs and providers could be gaining a particular advantage when charging an out-of-network health plan. "The Upshot" reports that, under federal law, insurers are required to pay out-of-network clinicians' or labs' full "cash price" for the test, as long as the provider or lab lists that cash price online. And since the federal government doesn't regulate the prices providers and labs charge for health care services, clinicians and labs can set their own cash prices for the tests, therefore allowing them to charge insurers thousands of dollars if they choose, "The Upshot" reports.

"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."

Patients not completely protected

Although the federal government has largely protected patients from being charged for coronavirus tests directly, Americans may wind up paying for the tests in the form of higher insurance premiums, "The Upshot" reports.

Further, labs and providers could perform additional tests intended to diagnose respiratory illnesses, such as the flu, while also testing for the new coronavirus, and charges for those tests could be passed along to patients via their co-payment requirements or deductibles.

In addition, Americans enrolled in private individual health plans or employer-sponsored coverage may be required to cover some costs for the coronavirus tests via their copay or deductible requirements, though many insurers have announced that they will not pass costs for coronavirus testing and care along to their members—at least temporarily, USA Today reports (Kliff, "The Upshot," New York Times, 6/16; Stellino, USA Today, 6/9).

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