BlueCard Policy Causing Clinical Labs to Go Unpaid

Blues plans are sending payments to patients, but patients are not paying their lab providers

CEO SUMMARY: Clinical laboratories doing lab test work for Blue Cross Blue Shield patients using their BlueCard benefit are no longer being paid by the Blues plans. Some Blues plans are sending those reimbursement checks directly to their members with instructions for the patient to use those funds to pay their lab bills. Instead, most patients are keeping the money. This policy is having a particularly detrimental effect on labs that provide testing in support of pain management.

DURING 2012, the Blue Cross Blue Shield Association (BCBSA) implemented major changes in its long- established Blue Card program. Now the consequences of those changes are becoming visible.

Clinical laboratories are reporting a number of unintended consequences as a direct result of the changes to Blue Card policies. In some cases, patients are being negatively affected by the implementation of these revised policies.

For decades, the BlueCard program was a simple and effective benefit for members of Blue Cross Blue Shield (BCBS) plans because it allowed members of one state BCBS plan to access care when they traveled or lived outside their home BCBS state.

Under the changes that went into effect in the BlueCard program in October 2012, regional Blue Cross Blue Shield plans have been issuing reimbursement for clinical laboratory tests directly to the patients. This happens when patients require lab testing and visit a physician outside of their home states for any lab work done on their behalf.

The theory behind this payment arrangement is that the patient will use those funds to pay the laboratory for those lab tests. But the unintended consequence is that many patients do not pay for their lab services after getting a check for such services from their Blues plans, sources told THE DARK REPORT.

Patients Keep the Money

 Instead, the patients keep the money. This is particularly concerning for patients who have had drugs-of-abuse testing as physicians monitor their pain management treatment.

At one lab company serving the pain management market, a lab executive stated that the lab sees patients using the money issued to them by the Blues plans to buy drugs. Other labs report that their billing and collections departments are being told by patients that they have already spent that money on consumer products, vacations, or down payments on automobiles.

This situation was predicted last year by several clinical laboratory associations. It is a well-established fact that, when a health insurer sends the patient a check for money that is meant to reimburse the provider, that provider’s bad debt and collection costs skyrocket.

This affects clinical laboratories more than other providers. That is because, unlike a physician who physically sees the patient, laboratories generally have no direct relationship with the patient. This is particularly true when the specimen collection was done in a physician’s office.

Pay The Patient Strategy

To be sure, this strategy of paying the patient is not uncommon. In the health insurance industry, it’s called “Pay The Member” or PTM, a source told THE DARK REPORT. “Some larger health insurers use PTM according to the benefit design or at the request of the health plan’s employer that is the plan sponsor,” the source said.

What’s new about the PTM strategy today is how the Blue Cross Blue Shield Association has expanded its use as part of the revised policies that took effect last October. These policies were broadly interpreted as an effort by the BCBSA to prevent network physicians from referring patients to out-of-network laboratories.

However, although PTM seems to have been around a while, reports are filtering in from a number of sources that other insurers are using “pay the member” more frequently than in previous years. It is said that UnitedHealthcare (UHC), Cigna, and Aetna are all using PTM more frequently.

One Way to Deter Leakage

One long-time industry observer confirmed these developments. “In 2004, UHC introduced this strategy in select markets,” he stated. “At the time, the strategy was designed—as evidenced most recently by the BlueCard changes—to deter leakage to out of network services by forcing laboratory test providers to go to the patient for payment.

“However, in today’s healthcare marketplace, there is a new reason to try to force physicians to use only in-network labs and that is the sharp increase in drugs-of-abuse testing,” continued this individual. “Health insurance plans are seeing skyrocketing volumes of claims for lab tests associated with pain management. You can bet that health insurers want to force this PTM strategy on those lab companies serving the pain management market as a way to constrain that utilization.”

BlueCard Changes Do Impact Patients

IN RESPONSE TO THE NEGATIVE PATIENT IMPACT of the changes made last year to the Blue Card program, the Lawful Access and Abuse Deterrence (CLAAD) in Washington, D.C. published an analysis of the situation.

In a recent article, “Insurer Efforts To Reduce Rx Abuse: Life Savers or Money Savers?” on CLAAD’s web site (, CLAAD said, “Insurers like Blue Cross/Blue Shield and Cigna are experimenting with policies that restrict in-network coverage for lab services— like urine drug testing to verify abstinence or dosing compliance—to a single provider. All others are treated as out-of- network providers, leading to higher deductibles and co-pays, and greater paperwork hassle for patients.”

The article explained that, because physicians do not collect payments for lab services, the BCBS plans have been paying patients directly for laboratory services, forcing the labs to collect from the patients.

“These policies award the contracted provider an effective monopoly by driving the non-contracted [lab test] providers out of the market,” the CLAAD explained. “Meanwhile, patients trying to sustain a fragile recovery get something incredibly dangerous, an insurance check that should be used to pay medical bills but could otherwise be spent in a moment of weakness.”


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