The Center for Medicare and Medicaid Services (CMS) attempts to pay providers for roughly average total costs of a service. CMS believes that COVID tests will cost anywhere from $35 to $100 depending on technology, place of service and type of diagnostic test. However the CARES Act is encouraging price gouging for out of network services.
UCSF’s hospital charged the equivalent of a Volkswagen Jetta for a COVID-19 test that Medicare would pay, at most, $100 for.
And Cigna (or the employer) agreed to pay *$9,300*.
A tale of price-gouging and awful negotiating. Perfectly emblematic of the U.S. health care system. https://t.co/HZnnpF6lkF
— Bob Herman (@bobjherman) June 1, 2020
Loren Adler of the Brookings Institute identified how the CARES Act encourages this type of price gouging:
How a provision tucked into the CARES Act might spur price-gouging by labs & hospitals & how to fix it.
Plus a deep dive on the different COVID-19 testing methods & how these might evolve over time.https://t.co/nlB5h84QcJ
— Loren Adler (@LorenAdler) April 10, 2020
Under current law, as long as a hospital has a list price publicly posted somewhere, the hospital will be getting full list price if the test is out of network. There is no surprise billing as the cost sharing is waived by current law. However the exorbirant list price will feed back into higher premiums and lower wages.
The policy solution is to say that any COVID testing (or any other services) that are not in network will be paid at a percentage of Medicare. 200% Medicare might be reasonable, 500% Medicare might be reasonable. 9300% of Medicare is fundamentally unreasonable.
trollhattan
Ye gods, nearly twenty grand? DOD contractors are probably taking notes.
different-church-lady
My five days in the hospital had a sticker price less than half of that, and it included two COVID tests.
PenAndKey
Why did my brain immediately jump to, “It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”?
Mary G
Hoocoodanode that cutting budgets for knowledgeable Congressional staffers like David and letting lobbyists write legislation instead would let shit like this happen?
different-church-lady
@PenAndKey: Answer: 42
Thumb Weaver
The fact that there’s a “you save” line on the invoice makes me wonder whether this is all a put-on. Cigna never would pay that; they just want you to think they’re saving the customer massive money.
scav
Well, that’s yet another way to make sure that only the “right sort” are able to survive this plague — tidy up those voting rolls rather nicely they chuckle.
taumaturgo
A fractured and failed healthcare system that can’t or won’t self-correct even on the onslaught of a pandemic. A system that oozes with systemic racism that is raking havoc among the disadvantaged and most needy. This is the system suburbanite Americans fight to keep. This is the system, according to leading politicians, well to do Americans love. It is amazing that some folks seem perplexed at the current level of anger and frustration that is driving the current protests.
Another Scott
Thanks for this, David.
That is a solution, but not the solution, IMHO.
There’s a bill in the House now that would ban members from owning stock in individual companies. It would help reduce the “insider trading” stuff that we’ve heard about recently.
There should be rules about publicizing who is pushing for these provisions in the law. Who wrote that section of the CARES act, who put it in the bill, and why? There should be an easily searchable database of all legislation that answers those questions for every line of a bill. We need to know who is doing this stuff or we’re never going to get rid of it.
Also, this nonsense about In/Out of Network is a huge scam. We all know it. It should be done away with by law. It does not cost orders of magnitude more to pay a medical bill depending on whose pocket the money comes out of. The solution to the systemic problem isn’t to say – piecemeal – that Medicare will pay for it. The solution is to fix the problem of outrageous list-price bills.
Yes, do the “Medicare will pay for Out of Network” patch now, but fix the system too. (If we don’t fix the system, they’ll figure out another category that they can dump people in to demand huge payments.)
Thanks again. My $0.02.
Cheers,
Scott.
Leszek Pawlowicz
This is SOP for a long time for many hospitals. I was treated for a possible rabies exposure last summer. According to a health services information company, the median reimbursed cost for treatment is $4500; according to the CDC, the average cost for medication (immunoglobulin plus 4 rabies shots) is $3800. My hospital billed my insurance company $48,633, including $45,700 for immunoglobulin and two rabies shots; they were reimbursed about $39,000 by insurance. I screamed bloody murder, and they reduced the medication costs by about $27K, which still left them with far more than the national median.