Beware of Increased Deductibles and Copays on Lab Tests and Procedures

Blue Cross/Blue Shield plan will cut out middle man markups that doctors and medical clinics charge for outside lab services …….a St Thomas MD and the Tennessee Medical Association give their opinion. doctor

Patients may get stuck with lab bills after insurers cut reimbursements
Dec. 6, 2013 |

Written by
Tom Wilemon
The Tennessean

Patients may be writing multiple checks and paying more for a visit with their doctor as insurers slash reimbursements to physicians for blood work.
After a similar move by its competitors, BlueCross BlueShield of Tennessee has notified doctors that it will cut payments for lab tests in half. The trend puts the pinch on physician practices that do their own lab work as well as those that can make money by outsourcing the service.
The scenario sets the stage for consumers to be billed directly by lab companies, said Dr. Sally Burbank, a Nashville internist. Health care consumers could end up with multiple invoices for a doctor’s visit just as they do with a hospital stay. One bill would come from the practice for the time spent with a physician. The other would come from the laboratory that did the blood work.
“If we refuse to pay the lab bill, then the lab will be direct-billing the patients or the insurance company,” Burbank said. “If they bill insurance but it’s all deductible, then the patient has to pay it.
“The labs charge patients much, much more than doctors because patients have a history of not paying their lab bills.”
Burbank said that after Cigna lowered its reimbursement for lab work, her practice got out of that billing cycle.
“Every time I did lab work, I lost money,” she said. “I was paying people’s lab bills, then losing money.”
Patients on high-deductible plans were “madder than a hornet” when they received bills directly from the independent labs, she said.
BlueCross BlueShield gave doctors within its preferred network until today to reject the change but said it had the option of terminating network status for those doctors who did. Doctors removed from the BlueCross network would lose patients because it would cost their patients more to use an out-of-network physician.
BlueCross plans to cover only 52 percent of what Medicare pays for lab tests instead of matching the Medicare reimbursement rate as it currently does.
Paying market rates
Roy Vaughn, vice president of BlueCross in Tennessee, said the insurer simply wants to pay the real market rate for lab services instead of paying more than what its competitors pay. And he said the insurer has already contracted directly with lab companies that will do the services for the new reimbursement rates. Doctors have the option of sending specimens to those labs, he said.
“We want to make sure we are paying market rates — not more than market rates — because if we’re paying more than market rates, it inhibits our ability to win customers,” Vaughn said. “The bottom line of it all is when we pay more, it costs our customers more.”
The Tennessee Medical Association, which represents state doctors, has asked BlueCross BlueShield to reconsider.
“BlueCross is the biggest player in the state,” said Yarnell Beatty, vice president of advocacy for the association. “In most parts of the state, the largest pool of patients are going to be covered by BlueCross. It’s a volume issue. If you significantly cut reimbursements for a large pool of your patients, that’s going to have a significant impact on medical practices’ bottom line.”
Contact Tom Wilemon at 615-726-5961 or

Doctors are fighting mightily to maintain their income as Obama Care continues to reduce health care costs and they are squeezed by Medicare as the Baby Boomers reach Medicare age.

LabTestMDsIn a recent Blog……

The Centers for Medicare and Medicaid Services could have spent $1 billion less in 2011 by negotiating lower rates for lab tests in the same way that state Medicaid plans and private insurers did. This is the finding of the most recent inspector general’s report.

According to The Wall Street Journal recently, a review of rates for the twenty most common lab tests discovered that CMS paid 18 to 44 percent more than state Medicaid plans and private insurers, soaking taxpayer for at least $910 million in unnecessary expenses. The figure is likely to be much higher once all 1,100 lab test fees are reviewed.  A CMS spokesperson claimed that the department may not have the authority to revise payments, a claim that hardly seem feasible considering all of the cuts made my CMS in recent months.

Medicare is the largest consumer of clinical lab services in the USA, spending over $8 billion on tests in 2010.  The IG  suggested Medicare could cut costs by requiring fee-for-service beneficiaries to contribute with a co-pay or deductible for lab services. This is the norm with most private insurers. Eleven states also require lab fee co-payments in their Medicaid programs.


Mr. Bynon is a Medicare benefits expert, senior rights activist, proud U.S. Navy veteran and coffee achiever extraordinaire.  He blogs regularly on (Medicare news) and (senior health).  Connect with him on Twitter @MedicareWire.


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