UnitedHealthcare Comments on Labs’ Use of “Fee Waivers”

Enticing patients with offer to waive fees undermines health insurers’ efforts to manage population health

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PATHOLOGISTS AND LAB SCIENTISTS are familiar with the well-known scientific principle that, “for every action, there is a reaction.” This principle also holds true for the managed care contracting practices of the two national laboratory companies.

One action that is the subject of this story is the award, in 2007 by UnitedHealthcare, of a 10-year, exclusive national contract to Laboratory Corporation of America. One reaction came just a few months later, when Aetna, Inc., awarded an exclusive national contract to Quest Diagnostics Incorporated.

In the ongoing battle of action/reaction between the two national lab companies, the need to retain and increase market share to keep Wall Street happy is the motivation for a lab to aggressively push back as an out-of-network provider.

As noted on pages 12-15, in Florida, and possibly in other states, Quest Diagnostics is using the “Waiver of Charges” sales strategy of doing free testing to encourage doctors to continue using it when Quest is out of network. The “Waiver of Charges to Managed Care Patients” was addressed in an OIG Advisory Opinion of December 1994. The OIG also addressed this matter in Advisory Opinion 15-04, released earlier this year.

In a waiver of charges letter from Quest to a physician in Florida, the letter identifies specific UnitedHealthcare insurance plans, including those that are in the laboratory benefit management plan that is managed by BeaconLBS, a business division of LabCorp.

When asked about the use of the free testing, or “Waiver of Charges” tactic, Elizabeth Calzadilla-Fiallo, UHC’s Director, Public Relations for Florida and the Gulf States Region, made this statement to THE DARK REPORT: “Efforts to purposely steer patients away from their in-network labs and to non-participating providers is disingenuous and jeopardizes the patients’ ability to maximize the insurance coverage that’s available to them and that they’ve paid for.” She would not elaborate nor answer questions about what steps UHC has taken to keep out-of-network labs from enticing patients with offers to waive charges.

UHC has been aware that the “Waiver of Charges” letter has been used since about 2010, and UHC has had several conversations with Quest Diagnostics in which it asked the lab to stop offering to waive charges, Calzadilla-Fiallo said.

Keeping Members In-Network

UnitedHealthcare has good reasons to keep its members in-network. That’s because, like all health insurers, it needs the data it gets from clinical laboratory testing results for two reasons. One is to track appropriate utilization of services. The second is to better manage patient care, particularly by identifying gaps in care and helping providers close those gaps.

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