Out-of-network providers that charge more for COVID-19 tests are performing a greater share of them during this phase of the pandemic, leading to rising expenses among health insurance companies, the trade group AHIP maintains in a report published Tuesday.
The number of out-of-network providers charging at least 50% more than the commercial average for COVID-19 tests has doubled since the start of the pandemic, with 36% of providers pricing tests at above the standard rates.
The share of providers charging at least $185 for a coronavirus test rose to 54% in March, compared to 42% last April when the pandemic was new to the U.S., according to the Washington-based insurance industry trade association.
Out-of-network providers administered 27% of COVID-19 diagnostic, antibody and antigen tests in March, a 6% increase from last April, AHIP found by surveying commercial insurance claims. The average price for a COVID-19 test is $130.
These higher prices and rising claims from out-of-network providers hit insurance companies right in their wallets. The Coronavirus Aid, Relief, and Economic Security (CARES) Act requires insurers to cover testing without cost-sharing during the public health emergency. The CARES Act instructs insurers to pay out-of-network providers whatever their listed cash price is and bars them from negotiating with them for lower rates.
"As the nation continues to address the pandemic, affordable testing is key to reducing the spread of COVID-19," Jeanette Thornton, senior vice president of product, employer and commercial policy, said in a news release. "COVID-19 testing price gouging threatens the progress we are making against this deadly virus, and we urge the administration, Congress and policymakers to take deliberate steps to ensure testing is accessible and affordable for all Americans."
AHIP wants Congress to establish a market-based pricing benchmark for tests delivered out-of-network and asks policymakers to accelerate the availability of rapid tests consumers can use at home.
While the CARES Act requires insurers to waive COVID-19 testing cost-sharing, it does not require them to cover treatment for coronavirus. Many commercial and not-for-profit insurers have reinstated cost-sharing requirements for COVID-19 patients. Democratic lawmakers have called for insurers to cover these fees, arguing they are putting "profits before the wellbeing of the people of this country."
While the number of tests out-of-network providers perform has increased since last spring, AHIP found the share of tests conducted in high-cost settings has declined. The number of coronavirus tests administered at hospitals decreased 13 percentage points since the start of the pandemic, and these sites represented just 5% of all service locations in March, AHIP found. The number of tests standalone labs performed increased 3 percentage points to 57% and tests performed at physician offices and clinics increased by 10 percentage points to 27%.
The change in the sites of care could explain the drop in the highest-priced tests, AHIP said. The number of tests that cost at least three times the commercial average—$390 or more—decreased by 5 percentage points during the same time frame.