The major insurers are acting in good faith in that they are moving to waive member cost sharing for COVID-19 testing.
BREAKING: tonight @UnitedHealthGrp joins @Cigna and @Aetna and several Blue Cross plans waiving #COVID19 cost-sharing. Self-insured employer plans they administer will likely follow as more firms take measures to contain outbreak. $UNH https://t.co/qn9TfICXjv
— Bertha Coombs (@berthacoombs) March 7, 2020
All Blues are waiving the cost sharing.
This is a needed step so that testing and treatment do not face cost barriers.
But this is only on the consumer-insurer cost-sharing interactions. No cost-sharing on needed testing effectively makes the demand curve nearly vertical.
However, it is an incomplete step as these actions are not addressing the insurer-provider contractual relationships of in network or out of network charges. OON charges lead to balance billing opportunities. Balance bills consist of the difference in what an OON provider charges and what an insurer pays. That increment can be sent to the patient. Not all OON provider groups will balance bill but some do and may.
The Health Care Cost Institute (HCCI) examined out of network (OON) billing for commercial groups last year. They found different prevalence of OON billing that varied by geography and specialty. OON billing is an opportunity for a provider group to engage in balance billing and therefore the creation of surprise bills. I want to examine specialty.
From their data, the most common specialty to have an OON bill is an independent lab. The second most common Emergency Medicine.
COVID-19 requires a lot of testing. Some people will be using lots of emergency services provided by EM docs.
We should expect a significant amount of testing and ED services to be provided by OON providers.
Some of them will be reasonable decent actors. Others will have a strong incentive to balance bill and hope that they can get to the airport before either a mob with pitchfork and hot torches or the FBI can reach them.
About Robert Redfield, Director Of The CDC
Yutsano
I might be wrong on the details, but from what I understand Washington state just passed a law where this kind of billing is now illegal. So at least here I get protection from both the cost share (state insurance commissioner made that mandatory last week) and a sudden shock of an OON bill. I hope protection like that spreads across the country until a saner universal health system gets created.
Chetan Murthy
@Yutsano: CA has had a law banning balance-billing for a while. But (gotcha!) there’s a loophole: certain plans are exempt from the law (I don’t remember precisely which kinds, but maybe it has something to do with smaller businesses or something?) and (haha!) the most recent attempt to plug the loophole (last year) was stymied in the legislature. Again.
Joy.
VOR
My understanding was the testing is currently being performed at either CDC or State labs, not private labs. If the Department of Public Health for State X does the test, how is that billed?
Of course as more test kits are delivered the testing will filter down to private labs, I assume.
Mike J
WA Health Benefit Exchange opened a special enrollment period.
jl
Thanks, this is an extremely important post. Getting the vast majority of sick and exposed people handled properly asap is one key to epidemic control that over the long term minimizes death, illness and massive economic costs. We need emergency measures to ensure actual quick self-quarantine of sick and exposed and very quick treatment of the sick. That is really the only thing that will work right now for quite a while if there are a significant number of cases that will emerge over a prolonged period of time.
Also, the previous post on Trump’s director of the CDC is also revealing. He seems to know nothing about epidemic control, but thinks he does, which is dangerous.
Travel bans, shut-downs, event cancellations, expensive social distancing does not solve the long term problem of the ultimate size of the epidemic because it delays the slows the reckoning, it does not prevent it. Because it operates on partitioning the pools of susceptibles vulnerable to infection over a limited space and time. They always start leaking eventually. As a common sense check, when can you lift them when the basic reproduction rate is greater than one, and there are still cases rambling around? The answer is never. You end up just waiting for the next outbreak and then have to repeat ruinous lock downs again. This is well known in epidemic control, and is sometimes called the ‘rebound problem’ The disease dies down, and as soon as lock-downs and enforced social distancing policies, or unsustainable individual social distancing lets up, the epidemic starts up again. This is why epidemics are often double peaked. This mess goes on until the pool of sustainables is reduced to achieve herd immunity.
Vaccination prevents this vicious cycle because it is a super cheap way to reduce the pool of susceptables locally and globally in a country to achieve heard immunity on a sustainable basis.
Cheap, easily implemented and sustainable methods of reducing transmission are needed if the pool of susceptables cannot be reduced to the level of heard immunity. For the disease to stop causing big problems, absent reducing transmission, heard immunity has to be achieved, and that is done either through a lot of people getting infected for through immunization. Reduced transmission cannot happen if there are any significant barriers to care. So, case tracing, testing to identify most important cases and exposed to quarantine, quick treatment on a sustainable basis are necessary for sustainable control of an epidemic when you operate on transmission, rather than the pool of susceiptibles.
The CDC neglect of testing is puzzling. The test as initially used in China had problems that may have made it useless for population level surveillance in a low prevalence setting. But that does not explain why the CDC did not use it in settings where the prevalence was high enough that it would be useful. So, I’m not willing to say with info we have now that the CDC developing its own test was a blunder or a boondoggle, but I don’t see any reason why the existing test was not used where it would be useful
California may be a case where there have been real, and serious consequences to the lack of testing capacity. From what I have read, California has been following a transmission based control policy of aggressive case tracing that tried to ID all cases and exposed (above a threshold probability they would get sick). That seemed to work well for a while (except for a previous docking of the Grand Pirincess). Anyway, without adequate testing capacity to get a finer calibration of who should be traced, the job of this kind of resource intensive case tracing just got infeasible. So, from what I read in the news, California may have to abandon that approach and move to enforced social distancing. From news stories I’ve read, many local health departments had zero testing capacity as of last week.
OK, end of rant, except to thank David for bringing up a very very important issue in how to control this epidemic without incurring enormous health and economic costs.
Edit: just so people know, I am not spouting stuff from the top of my head. There has been a lot of research on how to control the next flu pandemic, and I am just summarizing that literature in this comment.
L85NJGT
Independent labs aren’t some mom and pop shops. Labcorp and Quest are large corporations doing $7-8 billion in yearly revenue.
Alex
@VOR: Testing at public health labs is free, but good luck qualifying. They didn’t even test all the workers at the Washington nursing home yet. Without testing, not only can’t we do contact tracing, it’s harder to politically justify closing large venues etc.
Mj_Oregon
I got a surprise letter from my Medicare Advantage plan in early February informing us that the radiology group that serviced the hospital my PC doctor uses for our needed tests was no longer in network. After hours and hours of chasing down who was now filling the radiology needs of our local hospital, the best I could find out was that only TWO of the 17 radiologists in the new group were in network with our AARP Medicare Advantage plan. So I guess my husband and I are stuck with surprise bills no matter what kind of radiology testing we might need in the future. This is at a hospital that services a whole county in Oregon.
And of course, the AARP Medicare Advantage plan is NOT one that has agreed to waive cost sharing for COVID-19 in an agreement with the state of Oregon. Aren’t we the lucky ones?