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TAHP News: Complete Coverage

Texas Should Step in to Stop Price Gouging for COVID Tests

Wednesday, July 22, 2020  
Posted by: Jamie Dudensing, CEO
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The COVID-19 pandemic poses unprecedented challenges to Texas and our nation, touching every facet of American life. In the face of these challenges, Texas Health Plans are committed to curbing the virus and helping Texans receive the testing and care they need to stay healthy—including eliminating out-of-pocket costs for Texans by covering COVID treatment and testing at no cost. The health and well-being of millions of Texans is our highest priority.

A Dangerous Trend

In Texas, we are seeing a dangerous new trend in which a small number of providers are billing outrageous amounts for COVID-19 testing. While most providers charge about $100 - $150 per test, some providers—usually freestanding ERs and labs—are clearly price gouging Texans for tests with charges of over $1,000. These providers also regularly pile on charges for thousands more in fees associated with the visit. These combined charges are often more than 2,000% of what Medicare pays. 

Total claims for COVID-19 testing and initial treatment can be as high as $17,000 for a single visit, easily meeting Texas’ new price gouging threshold. These exorbitant prices for COVID-related care are just the latest in a long line of examples demonstrating the need for stronger protections against price gouging and unfair billing practices for health care services in Texas. 

Price Gouging for COVID Testing Will Raise Health Care Costs

If this trend of skyrocketing COVID-19 testing prices continues, Texans and Texas employers will eventually be on the hook for more expensive health insurance premiums.

A recent Wakely study found that COVID diagnostic testing will cost between $6B and $25B a year, while antibody testing will cost between $5B and $19B a year. With some projections showing COVID-related costs to the health insurance industry of $30B to $547B over the next two years —as well as apotential 40% premium increase —it’s a particularly bad time to let unfair billing practices contribute to the overall cost of health care.

As a result of this problem, the U.S. House Committee on Energy and Commerce has requested information from the freestanding ER industry about its practices and prices for both types of COVID-19 testing. The request comes after the committee conducted an initial examination that yielded disturbing information about the price of COVID-19 tests and providers’ compliance with federal Families First and CARES acts.

In a letter to 10 health care providers and the National Association of Freestanding Emergency Centers, Energy and Commerce Committee Chair Frank Pallone, Jr. (D-NJ) wrote, “These examples we have received, if accurate, are unconscionable and clearly excessive. Meanwhile, based on the committee’s review, it appears that your company has failed to list the cash price for the COVID-19 diagnostic test on a public website, which is in violation of the CARES Act.”

It’s Time for Texas to Stop Providers From Price Gouging Their Patients

Many states are already committed to combating COVID-related fraud and price gouging, and stronger state action aimed at preventing price gouging and prohibiting surprise billing in Texas is needed to protect families and employers.

Texas already has the tools it needs to address price gouging by freestanding ERs. Last session, the Texas Legislature passed a law that gives the attorney general authority to take action against freestanding ERs that engage in unconscionable pricing, and Texas’ Health and Human Services Commission has the power to enforce laws that prevent those same facilities from misleading patients about their status as an out-of-network health care provider. 

It’s important that our state leaders exercise their authority to protect Texas families and employers. No Texan should have to worry about receiving a surprise bill or being price gouged for health care—certainly not during a global pandemic. These profit-driven tactics negatively affect affordability for everyone, especially in the long term. It has never been more important to rid our health care system of unfair billing practices.

In the Meantime… How to Reduce Your Risk of Extra Testing Costs

  • Call your primary care doctor before getting tested to get your doctor’s testing order and recommended testing site (the order makes the test possible at no cost to you)
  • Ask the testing site if it has any charges or fees not covered by insurance
  • Do not authorize any non-COVID tests unless your doctor orders them
  • For Texans not paying with insurance, shop around on the web or by phone to compare testing charges and possible add-on fees
  • Avoid freestanding or hospital ERs—which usually charge more—unless it is a medical emergency

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