Alexa Kasdan had a cold and a sore throat.
The 40-year-old public policy consultant from Brooklyn, N.Y., didn’t want her upcoming vacation trip ruined by strep throat. So, after it had lingered for more than a week, she decided to get it checked out.
Kasdan visited her primary care physician, Dr. Roya Fathollahi, at Manhattan Specialty Care just off Park Avenue South, and not far from tony Gramercy Park.
The visit was quick. Kasdan got her throat swabbed, gave a tube of blood and was sent out the door with a prescription for antibiotics.
She soon felt better and the trip went off without a hitch.
Then the bill came.
Patient: Alexa Kasdan, 40, a public policy consultant in New York City, insured by Blue Cross and Blue Shield of Minnesota through her partner’s employer.
Total Bill: $28,395.50 for an out-of-network throat swab. Her insurer cut a check for $25,865.24.
Service Provider: Dr. Roya Fathollahi, Manhattan Specialty Care.
Medical Service: Lab tests to look at potential bacteria and viruses that could be related to Kasdan’s cough and sore throat.
What Gives: When Kasdan got back from the overseas trip, she said, there were “several messages on my phone, and I have an email from the billing department at Dr. Fathollahi’s office.”
The news was her insurance company was mailing her family a check ― for more than $25,000 ― to cover some out-of-network lab tests. The actual bill was $28,395.50, but the doctor’s office said it would waive her portion of the bill: $2,530.26.
“I thought it was a mistake,” she said. “I thought maybe they meant $250. I couldn’t fathom in what universe I would go to a doctor for a strep throat culture and some antibiotics and I would end up with a $25,000 bill.”
The doctor’s office kept assuring Kasdan by phone and by email that the tests and charges were perfectly normal. The office sent a courier to her house to pick up the check.
How could a throat swab possibly cost that much? Let us count three reasons.
First, the doctor sent Kasdan’s throat swab for a sophisticated smorgasbord of DNA tests looking for viruses and bacteria that might explain Kasdan’s cold symptoms.
Dr. Ranit Mishori, a professor of family medicine at the Georgetown University School of Medicine, said such scrutiny was entirely unnecessary. There are cheap rapid tests for strep and influenza.
“In my 20 years of being a doctor, I’ve never ordered any of these tests, let alone seen any of my colleagues, students and other physicians, order anything like that in the outpatient setting,” she said. “I have no idea why they were ordered.”
The tests might conceivably make sense for a patient in the intensive care unit, or with a difficult case of pneumonia, Mishori said. The ones for influenza are potentially useful, since there are medicines that can help, but there’s a cheap rapid test that could have been used instead.
“There are about 250 viruses that cause the symptoms for the common cold, and even if you did know that there was virus A versus virus B, it would make no difference because there’s no treatment anyway,” she said.
(Kasdan’s lab results didn’t reveal the particular virus that was to blame for the cold. The results were all negative.)
Kasdan’s insurance company mailed her family a check for more than $25,000 to cover most of the lab tests, and the doctor’s office said it wouldn’t collect the leftover $2,530.26 from Kasdan. The insurer since has stopped payment on the check it issued and is investigating.
The second reason behind the high price is that the doctor sent the throat swab to an out-of-network lab for analysis. In-network labs settle on contract rates with insurers. But out-of-network labs can set their own prices for tests, and in this case the lab settled on list prices that are 20 times higher than average for other labs in the same ZIP code.
In this case, if the doctor had sent the throat swab off to LabCorp ― Kasdan’s in-network provider ― it would have billed her insurance company about $653 for “all the ordered tests, or an equivalent,” LabCorp told NPR.
The third reason for the high bill may be the connection between the lab and Kasdan’s doctor. Kasdan’s bill shows that the lab service was provided by Manhattan Gastroenterology, which has the same phone number and locations as her doctor’s office.
Manhattan Gastroenterology is registered as a professional corporation with the state of New York, which means it is owned by doctors. It may be the parent company of Manhattan Specialty Care, but that is not clear in its filings with the state.
Fathollahi, the Manhattan Specialty Care physician, didn’t respond to requests for comment. Neither did Dr. Shawn Khodadadian, listed in state records as the CEO of Manhattan Gastroenterology.
The pathologist listed on the insurance company’s “explanation of benefits” is Dr. Calvin L. Strand. He is listed in state records as the laboratory director at Manhattan Gastroenterology, as well as at Brookhaven Gastroenterology in East Patchogue, N.Y. We tried to reach him for comment, as well.
Even though Kasdan wasn’t stuck with this bill, practices like this run up the cost of medical care. Insurance companies base premiums on their expenses, and the more those rise the more participants have to pay.
“She may not be paying anything on this particular claim,” said Richelle Marting, a lawyer who specializes in medical billing at the Forbes Law Group in Overland Park, Kan., who looked into this case for NPR. “But, overall, if the group’s claims and costs rise, all the employees and spouses paying into the health plan may eventually be paying for the cost of this.”
Marting said this is a common problem for insurance companies. Most claims processing is completely automated, she said. “There’s never a human set of eyes that look at the bill and decide whether or not it gets paid.”
Kasdan did pay her usual $25 copay for the office visit, and a $9.61 fee to LabCorp for a separate set of lab tests.
Resolution: “I made it very clear [to the doctor’s office] that I was unhappy about it,” Kasdan said. In fact, she told them she would report the doctor to the New York State Office of Professional Medical Conduct. Next, she reached out to “Bill of the Month,” a joint project of NPR and Kaiser Health News.
After a reporter started asking questions about the bill, BCBS of Minnesota stopped payment on the check it issued and is now investigating.
Jim McManus, director of public relations for Blue Cross and Blue Shield of Minnesota, said the company has a process to flag excessive charges. “Unfortunately, those necessary reviews did not happen in this case,” he wrote in an email.
Despite the sophisticated DNA tests and resulting $28,395.50 bill, Kasdan’s lab results didn’t reveal the particular virus that was to blame for her cold. The results were all negative.
The Takeaway: Surprise bills often arise when an in-network doctor or hospital involves another provider who isn’t in the patient’s insurance network, without the patient’s consent. But it is often nearly impossible for a patient to detect when that is occurring.
Patients can try to protect themselves from surprise bills by asking for details at their doctor’s appointments.
“I always ask where they’re sending my labs or where they’re sending my images [like X-rays], so I can make sure that’s in-network with my insurance company,” attorney Marting said.
They can also probe why a test is being ordered:
“It is OK to ask your doctor, ‘Why are you ordering these tests and how are they going to help you come up with a treatment plan for me?’” said Georgetown’s Mishori. “I think it’s important for patients to be empowered and ask these questions, rather than be faced with unnecessary testing, unnecessary treatment and also, in this case, outrageous billing.”
If you’re sitting on the exam table thinking, “I won’t ask. … How much could it be?” The answer could be a lot.
New York state has a law to protect patients from surprise bills. The law requires doctors’ offices to warn patients in advance that they are using an out-of-network provider and that patients may be responsible for excess charges. If a patient doesn’t consent to the involvement of an out-of-network doctor, then they must be financially held harmless for the bill. But it doesn’t prevent the out-of-network providers from sending a bill or collecting from an insurer.
Kasdan said she was not told that the throat swab was being sent out of network at the time of her appointment, though it’s possible one of the many papers she signed included a broad caveat that some services might not be in-network.
–Richard Harris, NPR News
People who suspect a bill is the result of a violation of law can report that to state authorities. In Florida, the Division of Consumer Services investigates complaints. You can contact NPR science correspondent Richard Harris at [email protected]. Bill of the Month is a crowdsourced investigation by Kaiser Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it.
Why am I NOT surprised when I read that this happened in New York State. One of the most corrupt states in this country second to California. And why do people put up with this kind of corruption and bullshit?
I agree Richard and all that corruption you speak of is moving here…
Appears that Healthcare Fraud & Abuse is alive and well in 2019.
Florida should be on the list .As a retired nurse, when I have a Dr appointment, I rarely ever see a doctor their medical notes are incorrect as well as there billing practices . I wonder if protocol has changed and the Dr are only in the office to sign RX and have lunch with the pharmaceutical rep.
The scams some doctors play without first notification to the patient is borderline stupid. And the insurance company pays, again borderline stupid. This is a perfect example of what’s wrong with doctors and insurance companies.. I’m just surprised her out of network didn’t result in her owning that $25k.
Elyse Vargas says
Insane! And we wonder why all our costs are so sky high? This is criminal.
We have a good Aetna plan and my husband has been receiving out of network Lab bills while in the hosptital or other locations in St Augustine.
He asks the nurses if the Lab is in network before the lab work is taken and they aren’t sure…when you are in the hosptital , you are trapped into consenting to the tests.
Stay away from: Pataleon Pathology Associates….they do alot of lab work locally….
With our good Aetna plan, they are still out of network.
My husband is a very detailed person and checks all bills and has been spending many hours fighting this.
Be careful!….. and always ask if your tests are in network.
There are State laws against this practice but not in Florida.
I always present them with a pre-prepared letter stating how I want my labs, x-rays etc. handled. They are further instructed that at no time shall they disregard those instructions and if they cant abide by them, to discharge me. I also have a letter prepared for my doctors, when and if I terminate my relationship with one, and I need to find another. For instance, I will not wait more than 3o minutes past my appointment time, I will not charged if I miss an appointment, if I don’t notify them within 24 hours of my appointment time (they don’t decide when my emergency is valid or not). Further instructions on handling prescriptions.etc. I tell them if they have a problem with my request, they are not the only doctor in town. They wont be getting my insurance dollars, and probably anyone else’s I may talk to.
Of course not in Florida. Wouldn’t want to hurt those poor business withy pesky regulations. I’m sure the huge profits will trickle down.
Show UP and VOTE says
Of course. Would anyone expect any less when you remove regulations, sabotage the Affordable Care Act, and privatize healthcare? This is the result. Power, money and greed, even from the doctors themselves. Unless you’ve been living under a rock, what are you seeing advertised on TV and on the sides of interstates? Hundred million dollar Hospitals. Healthcare conglomerates. Pharmaceuticals. They are all fat and happy, and fat and happy at OUR expense!
If you’re gainfully employed, you’re paying grossly more out of your salary as a percentage. If you’re self employed or a small business owner, you’re screwed! It’s all happening right before your eyes, and 40% of our population just gleefully and blindly marches along toward the cliff as if nothing is wrong.
Oh, but the markets! All time record highs! Unemployment all time low! Blind fools. Of course, when the bubble bursts (AGAIN), the adults in the room will come in to fix it (AGAIN), and then the unsympathetic greedy ass children will blame the adults for not fixing it fast enough (AGAIN), and the cycle starts all over (AGAIN).
The real reason for this is a direct result of the affordable care act. Prior to the ACA health care providers charged BS rates for services and insurance companies negotiated the prices down to a small fraction of the BS rate. This allowed the insurance companies to market their competitive costs, etc…
With the ACA insurance companies are required by law to cover all operating expenses and profits to be a maximum of 20% of the actual paid healthcare fees. This leaves insurance companies three options to increase profits: cut operating expenses, increase customer base, and increase healthcare fees. The first two options have been maximized leaving the last option to increase medical costs!
Healthcare providers and the insurance companies are in an unholy alliance to screw patients by ensuring no cost controls are in place for the healthcare providers. It is win/win for both the entities while the patients get screwed!
The WSJ did a great story on this about a year ago, a great read and educates people to what is really occurring. The ACA needs to be scrapped!
In 2009 my wife had a brain anuerism,all told ,the bills came to over 260000 dollars,I only had to pay $1800,because I had good insurance thru my job. some of the bogus charges were $8800 for a helicopter ride from St Augustine to Mayo ,in jacksonville, which my insurance company paid.Double charging ,saying 2 people were helping my wife relearn how to walk , when in actuality ,I was one of the people helping her, some pills which were over $240 each and on and on.I questioned every charge that I thought was bullshit, even though like I said ,I only paid $1800 out of pocket and my insurance company blindly paid almost everything ,including the $8800 helicopter ride.The reason the hospital gave as to why the overcharge so much is because they know that 35% of all patients will pay absolutely nothing. I hope thats not true, although I believe it is. I hate hearing people brag that they are only paying $5 a month for their medical bills ,just to keep the collection agency off their back .I consider them part of the problem. There is blame to be spread all around for high medical costs,at least this time her insurance company is fighting this crazy charge. I think this lady should have just had to pay her co-pay , and lab fee , and be done.
This doctor should be fined
Percy's mother says
Don’t rely on healthcare providers to give you correct information about in-network and out-of-network providers. They really don’t know. That is YOUR responsibility.
It’s YOUR responsibility to call your insurance company so as to get the correct provider information from the horses mouth, so to speak.
ALSO for God’s sake, SPEAK UP. Healthcare along with everything else is and should be a collaborative effort between you and the provider / physician / nurse / lab, etc. The buck stops with YOU. You have every right to request what’s being ordered, why its being ordered and to agree or not agree to the plan. ASK WHAT THE TREATMENT PLAN IS. If you don’t agree, don’t go ahead with it. Call your insurance company before agreeing. Always make sure you are IN-NETWORK. Sometimes the clerk in the doctor’s office doesn’t know.
As for the lady in the above-noted article, why did she consent to all those unnecessary labs? Didn’t she ASK what the orders were? Did she call her health insurance company to find out if the ordered labs would be covered? She evidently ASSUMED that the people at the desk in the physician’s office knew what they were doing.
NOTE: People who work in doctor’s offices are clerks and nothing more. Most have only elementary / basic education. They only get paid just above minimum wage. Don’t assume they know what they’re talking about. ALWAYS double-check with your insurance company before consenting to any order.
Medicare is a different story. Find out if the provider is participating or non-participating. If they’re non-participating, you will have to pay up front and submit the bill to Medicare for reimbursement.
Get educated people. Don’t be like little children thinking that people are going to look out for you and then cry about it when its too late.
They do know who is in what network…I had a fit when our PCM sent my wife to an out of network doctor. Luckily they caught it. Our PCM acknowledged the mistake and took care of it. I also had a doctor tell me I had no choice as to what pharmacy he was going to order a medication for me from. I said..ya know what Doc, I do have a choice.. our relationship is terminated. They are doctors, not God. Its their job to manage our healthcare, and look out for us. If they don’t, let them go…They work for us…we are paying them through our insurance companies. If they don’t provide the service, or put in the work or effort you deserve and are paying with your money….fire them. Its that simple.
Land of no turn signals says says
3 cheers for Obama care.
She said sarcastically: “NO. . . Hell NO. . . We Don’t Need No “Socialist” Universal Health Care”!
Astronomical “Out of Network” charges is just the tip of the iceberg. I was a health insurance supervisor for 11 years. No matter what they pay out, they NEVER loose money, they just raise the monthly premiums for everyone. Regulation of the insurance industry is now almost non-existent. . . especially in Florida. Rick Scott made sure of that! Capitalism (AKA profits over people) at its worst!
Just keep your heads in the sand. . . continue to vote Republican. . . and continue to “trust” insurance companies, “Big Pharma”, hospitals, labs and doctors.
But hey! At least no one can call us socialists! We’re proud to be capitalists who get bankrupted by medical bills!
This is what happens when the individual isn’t in charge of his health and welfare and unionized bureaucrats make the rules and enforce them. Don’t like it? Too bad. It’s all ya got now.
Media blames doctors and insurance companies and the dupes buy it.
@Follow the money – always
A typical Republican sagely shares over 300 words (which amount to buyer beware and we’re all in this alone) to admonish all that health care acquisition is little different from procuring a home, choosing and/or managing investments, etc. The aforementioned are NOT things of a kind. Thanks for nothing.
You may share in the self-serving malarkey and red baiting of your fellow Republicans – it will be small comfort when time and fortune call your number; When a medical catastrophe, e.g., birth defect, previously undetected acute medical condition, traffic accident, etc, attaches to your own blameless life – good luck – your fellow cannibals will be preying (sic) and celebrating too.
Just take comfort in the knowledge that you’re supporting the pernicious parasites who brought you to today: The tens of thousands of glib soulless lobbyists, their brothers and sisters in marketing and advertising, the cannibals listed in the defined statements of the profiteering corporations, and the exponentially greedier monsters who preside over impenetrably opaque “private equity” as it’s styled.
At least you’re getting to choose and keep all this:
government spending on healthcare by country
out of pocket healthcare costs by country
cost of healthcare by country