Surprise Billing: A Personal Story
Accounts of absurd or tragic interactions with the American healthcare system are common. A growing sub-genre of these stories involves surprise billing—many such overwhelming experiences have been recounted from trips to the ER to the result of routine medical testing. Today, on the eve of Thanksgiving, I am sharing a personal story that encapsulates some of the most infuriating idiosyncrasies of our current American system.
My wife and I have a healthy two-and-a-half-year-old son. My wife is now pregnant again and followed by a competent team of MDs and midwives at our local hospital. Being over 35 years old, she was advised not only to take a cell-free fetal DNA test to make sure there were no chromosomal abnormalities in the fetus, but also to be screened for some 274 genetic conditions that could be passed on to the baby. Because she tested positive for a potentially risky allele, her doctor recommended that I take a similar screening test to make sure that I did not carry the same variation, which thankfully I did not.
All seemed well, but did not end. A few weeks after my test, the lab that conducted the screening billed me for a little over $1,200. To ascertain how they reached this amount, I visited my insurer’s website. There, I learned that the screening company initially listed the price of the test as over $12,000, for a test most akin to the type of analysis a company like 23&me performs for $100. My gallant insurers negotiated down to a price of about $2,300 for the test, of which they agreed to cover nearly $1,100, leaving me to pay the rest. There is no documentation for how our insurance cut down the list price by more than 80%, but such negotiated rates are common practice. These kinds of backdoor negotiations over billing have attracted bipartisan political attention and Congress has recently pushed for more transparency.
To learn more about the American medical insurance system, I called my insurer and spoke to a polite and extremely helpful representative. She, somewhat confused by my story, first explained that they processed it as an out-of-network expense—although recommended by an in-network hospital with a blood draw performed by an in-network provider. She then revealed that the reason my bill was so high was because the test was performed out-of-state. To be honest, living in Cambridge, MA—arguably the world capital of the biotech industry—I was surprised that a seemingly simple test had to be sent to California for processing and that there were no alternative services that could have been done locally which would have prevented me from having to pay anything at all. The insurance representative finally advised me to always inquire about who performs any test to avoid surprise billings in the future.
There are a lot of disconcerting aspects to this story: the seemingly arbitrary pricing of these procedures, the lack of transparency on what is and is not considered in-network, the lack of choice (sometimes touted as the supreme attribute of any healthcare system), and the onus put on the patients to question procedures prescribed by trusted medical staff. Not only should patients—often under medical deadlines of their own—make minute inquiries about whether in-network testing can turn into out-of-network testing, but apparently they should also inquire about the final laboratory destinations of their samples! However, the most significant aspect of this story is probably how utterly commonplace it is. Although this story is specific to higher-risk pregnancies, surprise billing affects nearly everyone, especially people with less expansive coverage. Although some startups are trying (sometimes successfully) to reduce surprise billing, fixing the issue has proven incredibly difficult for private companies. There seems to be some political will to eliminate such a complex problem, including laws protecting patients, but pushback from providers is fierce and the perfect solution is still elusive.