When using a high deductible health insurance policy the question of how to navigate paying for labs and services often comes up. The great irony in healthcare is that there are often several prices for the same service or product and the price you are charged is often determined by how you were brought to the charge and who is “paying” for it. How you are brought to the charge can be by having shopped for the product or service yourself and finding a direct to consumer retail price, having been offered the service through your providers office (i.e. labs collected in a hospital or doctors office), or by having been given an order and an implication as to where the service should be performed (i.e. lab order form for Quest Diagnostics from your doctor). Who is “paying” (yes, I put that in quotes on purpose) is based on how the billing will be processed. There are three main routes here; you pay for it directly (cash or direct pay), you have the service billed through your insurance, or your provider or facility pays for it and passes the cost along to your insurance or directly to you. I put “paying” in quotes, because at the end of the day it is the patient who is ultimately responsible for the expense if your insurance denies part or all of the charge. The reason this matters is that all of those routes can determine a different pricing.

For example:

  • An insurance company that has a strong relationship and partnership with a particular facility or lab may negotiate better pricing than another insurance company.
  • If the billing is initiated by an out of network facility, lab, or provider there is a habit of over billing so that the maximum amount your insurance will pay is captured. For example if your insurance will pay $35 for a test and the lab only wants to gross $25 from the lab they would be missing out on $10 of additional profit if they only bill $25. If they are not contracted (in network) with that insurance plan they have no way of knowing ahead of time what the insurance company may be willing to pay so they may bill high to make sure they get the maximum amount. They may bill something ridiculous like $200 for the test to ensure this. The problem is that if your insurance only pays $25 for this out of network lab (meaning they had not agreed to a price with your insurance company) then the patient will get balance billed for $175 of totally inflated and unnecessary charge. If this has happened to you, you may be able to negotiate this down to a reasonable amount.
  • Paying for the service or lab directly and then submitting the charge to your insurance for reimbursement may be less costly than having the charge first pass through your insurance and being charged the unpaid amount. This may also be more costly if you insurance has negotiated a better price than you can find with another route.
  • Some practices and facilities take advantage of client pricing (the price the facility or lab offers them if they pay for it directly) and either pass along these savings to the patient or add a mark up to provide a profit source for the practice. Note that this may be good or bad, some practices and facilities may add mark up to certain items in order to keep other charges lower and may mean better pricing overall for the patient. However some facilities may simply do this to add hidden charges to their bottom line.

The challenge here is that there is no transparency provided to the consumer. I feel confident that if consumers were familiar with the price of these labs and services and could transparently shop around for the best and most cost effective route that our system would radically change.

 

Here are some ways to navigate this:

  • Fully understand your coverage.
    • Understand how your deductible is applied and what your co-insurance percentage is after you have met a deductible but have not met the maximum out of pocket expense limit.
    • Understand how in versus out of network impacts coverage and cost with your plan. Most HMOs only allow out of network charges for emergency care or for urgent care outside of a region where they have contracted providers. Make sure you understand how your deductible applies for these different routes. Some plans may have different deductibles, out of pocket limits, or co-insurance amounts based on whether the service or facility was in or out of network.
    • Clarify if there are any plan mandates for who can order certain procedures or tests. Some plans may require that all lab work be order from your in network provider to be eligible for coverage. Most plans seem to cover lab work equally so long as the lab used is in network.
    • Use your plans directory to make sure you know what providers and facilities are in network.
      • Labs: Your insurance company will have a preferred lab for you to get your testing completed at. Keep in mind that you should confirm which lab this is because your providers office or facility may have a preference that is out of network for your plan. (i.e. Your Doctor likes LabCorp and automatically gives paper requisitions with their header but your insurance company contracts with Quest Diagnostics.)
      • Providers: Using an in network provider, when available, will usually be more cost effective for the patient. Keep in mind that some providers may chose or be unable to participate in an insurance plan and not be available for contracted billing. (i.e. Naturopathic Physicians are excluded from coverage by many insurance companies. Some states have mandated this illegal and given the choice to the patient for how to use their coverage.)
      • Facilities: Hospitals, diagnostic centers, and other facilities are usually going to be more cost effective if in network. It is important to understand that while a hospital or facility may be in network, some of their providers or services they offer may not be.
  • Familiarize yourself with what options you have. This may be complicated, but by asking your providers, friends, and searching online you should be able to get a sense for your choices. This may mean finding a direct pay lab service that you can utilize nearby instead of having the labs billed through your insurance.
  • Call your insurance company and ask them to give you the negotiated pricing of certain procedures. This will help you make a more informed decision when comparing your options.

 

Case example for paying for lab testing:

A patient has a $5000 deductible and needs lab work. For one of the tests they find out from calling their insurance company and providing the CPT code for the test that the negotiated in network price with Sonora Quest is $13. They know from researching that if they purchase the test from Ulta Lab Tests (processed by Sonora Quest) directly with an account set up by my office it would cost $20.95 and if they purchase it directly from Sonora Quest without insurance it would cost $138.07. For this patient it made more sense to have the lab bill their insurance first and have the total charged passed along to them beings they had not yet met their deductible.

 

When collecting this information you will need some specific information:

  1. The CPT code for the test being ordered (i.e. Homocysteine is 83090). Without this the lab may not be able to identify which test you are referencing. These can be found on the test directory of the lab from which the test is being ordered or by searching online. Each lab will have its own test code, but the CPT code will be universal.
  2. What lab you will be completing the test at. Some insurance companies may need to know the specific location that you will be going to.

 

If you chose to pay directly for the lab or service and want to submit the charge to your insurance for reimbursement the lab or service MUST have been ordered by an eligible provider and be justified with appropriate diagnosis codes. If you purchase labs or services without a providers prescription you would not be eligible for any reimbursement. For my patients that utilize Ulta Lab Tests, so long as the tests were advised by me and the patient resides in Arizona I am happy to provide the necessary diagnosis codes for reimbursement submission.

 

Be informed and research your options. Call your insurance company and find out what pricing they can get for you and then decide what billing route makes the most sense for you. Don’t assume that billing your insurance first is the best or the worst route. You may be surprised by their having negotiated a better price for you even though you will be paying for it.

 

Please note that this is not intended to replace legal, insurance, or financial advice. It is simply a resource of information that I have collected through my own interactions and from patient accounts. Please verify all information and fully understand your insurance coverage prior to making any decisions.

Some pricing examples for labs I routinely perform:

  • Homocysteine
    • LabCorp Direct Pay – $143.25
    • Sonora Quest Direct Pay – $138.07
    • Ulta Lab Tests – $20.95
  • B12 Binding Capacity
    • LabCorp Direct Pay – $99.25
    • Sonora Quest Direct Pay – $94.18
    • Ulta Lab Tests – $133
  • RBC Folate
    • LabCorp Direct Pay – $143.25
    • Sonora Quest Direct Pay – $118.48
    • Ulta Lab Tests – $50.33
  • RBC Magnesium
    • LabCorp Direct Pay -$92
    • Sonora Quest Direct Pay – $141
    • Ulta Lab Tests – $20.95
  • RBC Zinc
    • LabCorp Direct Pay – $92.50
    • Sonora Quest Direct Pay – $114.71
    • Ulta Lab Tests – $68
  • RBC Copper
    • LabCorp Direct Pay – $63
    • Sonora Quest Direct Pay – $71.44
    • Ulta Lab Tests – $70.68

*Direct Pay means you pay the lab directly without using your insurance.

To purchase labs through Ulta Lab Tests: www.ultalabtests.com/drbuxbaum

To get the best pricing with Ulta Lab Tests, the first order needs to have been generate by me. Ulta Lab Tests is available in most states and you do not need an order from a provider.

Another direct pay option: Walk In Lab: www.walkinlab.com

Price examples are based on information available in early 2018 and is intended to only show examples for pricing available with direct pay options.