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."