Low Lab Test Prices and Uninsured Patients

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LOW PRICES FOR CLINICAL LABORATORY TESTS ARE CAUSING PROBLEMS for labs in California and Ohio. In this issue of THE DARK REPORT, you will learn about both situations. The California situation has gotten lots of play, but the Ohio situation is breaking news.

In California, both the California Attorney General and the Department of Health Care Services (DHCS) have an interpretation of the state law on the pricing of healthcare services to Medi-Cal that they want to enforce. Each state agency is taking steps to enforce this interpretation. As many as 300 licensed laboratories in the state have been drawn into one or both of these enforcement activities. (See pages 11-14.)

In Ohio, a primary care doctor and his county medical society created a partnership that helped uninsured and underinsured patients access affordably-priced laboratory tests. Patients could visit the medical society’s website and click through to an Internet-based lab test company to order tests priced at about the level of Medicare fees. In turn, the Internet-based laboratory company had a contract with one of the two blood brothers to use its network of patient service centers (PSC) and to perform testing at a discounted price. (See pages 3-8.)

What you will learn is that the Ohio arrangement is about to end. That’s because after CNN gave this uninsured lab test program positive news coverage last December, the national lab company terminated its contract with the Internet-based laboratory company. As a consequence, uninsured patients in the Akron area will lose access to affordably-priced tests that they have enjoyed for the two years that this program has operated.

I find it ironic that, in California, these national laboratory companies are mounting a strong legal defense of their long-standing practice of offering deeply-discounted prices to selected clients even as they submitted claims for the same types of tests to the Medi-Cal program for reimbursement at its higher fee schedule. But in Ohio, in an arrangement that involves less than 1,000 patients per month and is used primarily by uninsured and underinsured patients, one of these national labs wants to pull the plug and end a successful program that is valued by doctors in that community. Given the economics of the marginal costs to perform such tests, it is disappointing that so few laboratories are willing to serve the uninsured—even as a simple public service.

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