Pamela Valfer needed multiple covid tests after repeatedly visiting the hospital last fall to see her mother, who was being treated for cancer. Beds there were filling with covid patients. Valfer heard the tests would be free.
So, she was surprised when the testing company billed her insurer $250 for each swab. She feared she might receive a bill herself. And that amount is toward the low end of what some hospitals and doctors have collected.
Hospitals are charging up to $650 for a simple, molecular covid test that costs $50 or less to run, according to Medicare claims analyzed for KHN by (HPS). Charges by large health systems range from $20 to $1,419 per test, by 麻豆女优 shows. And some free-standing emergency rooms are charging more than $1,000 per test.
Authorities were saying 鈥済et tested, no one鈥檚 going to be charged, and it turns out that鈥檚 not true,鈥 said Valfer, a professor of visual arts who lives in Pasadena, California. 鈥淣ow on the back end it鈥檚 being passed onto the consumer鈥 through high charges to insurers, she said. The insurance company passes on its higher costs to consumers in higher premiums.
As the pandemic enters its second year, no procedure has been more frequent than tests for the virus causing it. Gargantuan volume 鈥 and counting, for one type 鈥 combined with loose rules on prices have made the service a bonanza for hospitals and clinics, new data shows.
Lab companies have been booking record profits by charging $100 per test. Even in-network prices negotiated and paid by insurance companies often run much more than that and, according to one measure, have been rising on average in recent months.
Insurers and other payers 鈥渉ave no bargaining power in this game鈥 because there is no price cap in some situations, said Ge Bai, an associate professor at Johns Hopkins Bloomberg School of Public Health who has studied test economics. When charges run far beyond the cost of the tests 鈥渋t鈥檚 predatory,鈥 she said. 鈥淚t鈥檚 price gouging.鈥
The data shows that covid tests continue to generate high charges from hospitals and clinics despite by insurers, of and pushback from state regulators.
The listed charge for a basic PCR covid test at Cedars-Sinai Medical Center in Los Angeles is $480. NewYork-Presbyterian Hospital lists $440 as the gross charge as well as the cash price. Those amounts are far above the $159 national average for the diagnostic test, which predominated during the first year of the pandemic, at more than 3,000 hospitals checked by HPS.
That鈥檚 the amount billed to insurance companies, not what patients pay, Cedars spokesperson Cara Martinez said in an email.
鈥淧atients themselves do not face any costs鈥 for the tests, she said. 鈥淭he amounts we charge [insurers] for medical care are set to cover our operating costs,鈥 capital needs and other items, she said.
Likewise at NewYork-Presbyterian, charges not covered by insurance 鈥渁re not passed along to patients,鈥 the hospital said.
Many hospitals and labs follow the Medicare reimbursement rate, $100 for results within two days from high-volume tests. But there are outliers. Insurers oftentimes negotiate lower prices within their networks, although not for labs and testing options outside their purview.
Billing by hospitals and clinics from outside insurance company networks can be especially lucrative because the government requires insurers to pay their posted covid-test price with no limit. Regulation for out-of-network vaccine charges, by contrast, is stricter. Charges for vaccines according to federal regulations, with relatively low Medicare prices as a possible guideline.
鈥淭here鈥檚 a problem with the federal law鈥 on test prices, said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University. 鈥淭he CARES Act requires insurers to pay the full billed charge to the provider. Unless they鈥檝e negotiated, their hands are tied.鈥
But even in-network payments can be highly profitable.
Optim Medical Center in Tattnall, Georgia, part of a chain of orthopedic practices and medical centers, collects $308 per covid test from two insurers, its . Yale New Haven Hospital collects from another.
Yale New Haven鈥檚 prices resulted from existing insurer agreements addressing unspecified new procedures such as the covid test, said Patrick McCabe, senior vice president of finance for Yale New Haven Health.
鈥淲e didn鈥檛 negotiate鈥 specifically on covid tests, he said. 鈥淲e鈥檙e not trying to take advantage of a crisis here.鈥
Officials from Optim Medical Center did not respond to queries from KHN.
Castlight Health, which provides benefits and health care guidance to more than 60 Fortune 500 companies, analyzed for KHN the costs of 1.1 million covid tests billed to insurers from March 2020 through this February. The analysis found an average charge of $90, with less than 1% of bills passing any cost along to the patient. Since last March, the average cost has gone up from $63 to as high as $97 per test in December before declining to $89 in February, the most recent results available.
In some cases, hospitals and clinics have supplemented revenue from covid tests with extra charges that go far beyond those for a simple swab.
Warren Goldstein was surprised when Austin Emergency Center, in Texas, charged him and his wife $494 upfront for two covid tests. He was shocked when the center billed insurance $1,978 for his test, which he expected would cost $100. His insurer paid $325 for 鈥渆mergency services鈥 for him, even though there was no emergency.
鈥淚t seemed like highway robbery,鈥 said Goldstein, a New York professor who was visiting his daughter and grandchild in Texas at the time.
Austin Emergency Center has been the subject of of high covid-test prices.
The center provides 鈥渉igh-quality health care emergency services鈥 and 鈥渙ur charges are set at the price that we believe reflects this quality of care,鈥 said Heather Neale, AEC鈥檚 chief operating officer. The law requires the center to examine every patient 鈥渢o determine whether or not an emergency medical condition exists,鈥 she said.
Curative, the lab company that billed $250 for Valfer鈥檚 PCR tests, said through a spokesperson that its operating costs are higher than those of other providers and that consumers will never be billed for charges insurance doesn鈥檛 cover. Valfer鈥檚 insurer paid $125 for each test, claims documents show.
Even at relatively low prices, testing companies are reaping high profits. Covid PCR tests sold for $100 apiece helped Quest Diagnostics by 49% in the first quarter of 2021 and quadruple its profits compared with the same period a year ago.
鈥淲e are expecting 鈥 to still do quite well in terms of reimbursement in the near term,鈥 Quest CFO Mark Guinan during a recent earnings call.
Hospitals and clinics do pay tens of thousands of dollars upfront when purchasing analyzer machines, plus costs for chemical reagents, swabs and other collection materials, maintenance, and training and compensating staff members. But the more tests completed, the more cost-effective they are, said Marlene Sautter, director of laboratory services at Premier Inc., a group purchasing organization that works with 4,000 U.S. hospitals and health systems.
A of running 5,000 covid tests on Roche and Abbott analyzers 鈥 not including that initial equipment price, labor or shipping costs 鈥 came to $17 and $21 per test, respectively.
Unlike earlier in the pandemic, lab-based PCR tests no longer dominate the market. Cheaper, rapid options can now be purchased online or in stores. In mid-April, some CVS, Walmart and Walgreens stores began selling a two-pack of Abbott Laboratories鈥 BinaxNOW antigen test for $23.99.
Regulations require insurers to cover covid testing administered or referred by a health care provider at no cost to the patient. But exceptions are made for public health surveillance and work- or school-related testing.
Claire Lemcke, who works for a Flagstaff, Arizona, nonprofit, was tested at a mall in January and received a statement from an out-of-state lab company saying that the price was $737, that it was performed out-of-network and that she would be responsible for paying. She鈥檚 working with her insurer, which has already paid $400, to try to get it settled.
Sticker shock from covid tests has gotten bad enough that Medicare set up a hotline for insurance companies to report bad actors, and states across the country are taking action.
Free-standing emergency centers , like the one Goldstein visited, particularly exorbitant prices, propelling the Texas Association of Health Plans to in late January. The 19-page letter details how many of these operations violate state disclosure requirements, charge over $1,000 per covid test and add thousands more in facility fees associated with the visit.
These free-standing ERs are 鈥渁mong the worst offenders when it comes to price gouging, egregious billing, and providing unnecessary care and tests,鈥 the letter says.
In December, the Kansas Insurance Department a lab whose cash price was listed at nearly $1,000. State legislatures in both and have introduced bills to crack down on price gouging since the pandemic began.
"If these astronomical costs charged by unscrupulous providers are borne by the health plans and insurers without recompense, consumers will ultimately pay more for their health care as health insurance costs will rise,鈥 Justin McFarland, Kansas Insurance Department鈥檚 general counsel, wrote in a Dec. 16 letter.
