We now know that many of us with private health insurance plans are entitled to a free cholesterol screening. The Affordable Care Act mandates it with no out-of-pocket costs if we meet certain criteria. But what if we don’t fit into that criteria or our insurance company decides we need to pay for one? If we aren’t high risk or under the age of 35, that just might happen. But how much should a lipid panel cost?
Finally, Max OOP gets a chance to pull back the curtain on healthcare pricing. I have been looking forward to this one.
The Lipid Panel
When I go for my free preventive health visit in October, my doctor will likely order a lipid panel (80061). If he doesn’t, I’m going to ask him to. We will use this to screen and monitor my cholesterol levels. It is basically the Cadillac of cholesterol tests.
Usually, when you hear the word ‘panel’ in the lab testing world, more than one thing is getting measured. I like to think of it as a panel of candidates at a political debate, each with a different perspective. What’s nice about lab panels is you don’t have to listen to a bunch of guesses and promises about the future of our healthcare. This panel is scientific, objective, and it measures several different cholesterol indicators and compares them to normal ranges. Politicians are human, subjective, and don’t measure much of anything.
The lipid panel (80061) measures things like total cholesterol, triglycerides, HDL cholesterol, and LDL cholesterol.
In some cases, it will be considered a diagnostic test and not preventive and we will need to worry more about pricing. My friends over at Healthcare Hustlers do a great job of explaining the difference between preventive and diagnostic lab services.
Lipid Panel Cost
When we talk about pricing for the lipid panel, keep in mind that the starting point is always the ‘out-the-door’ price for someone who has absolutely no insurance. You will sometimes hear me refer to it as the original retail price we might see at T.J. Maxx that no one pays. But this retail price is still important. It is a great starting place for when we start pushing back on providers and insurance companies. If we happen to be uninsured at the time of the test, it becomes even more important.
Normally, our insurance company will have a special deal with an in-network clinic, hospital, or reference lab to provide the lipid panel at a discounted price. This is sometimes referred to as the “allowed amount.” Our insurance company negotiates this price on our behalf. It is usually either a percentage of the out-the-door retail charge or a set fee per lipid panel.
Of course, these backroom negotiations are all handled behind the scenes so nobody can see what is really going on. If you want to know how much your insurance pays for a service like a lipid panel, you can reference your explanation of benefits or ask your insurance company and medical provider. Just a heads up, this usually takes several phone calls. It can be painful to get an accurate estimate for even simple healthcare services like a lipid panel.
How Much Will Max’s Lipid Panel Cost?
The retail price for my 2019 lipid panel will come in at $136.50 (before insurance). I will opt to have the test done in a hospital lab. This is right on par with the 2018 national average for this test. The price as of today is actually only $130, but the hospital price will be increased by 5% on October 1st, 2019. Hospitals are notorious for putting in 4-6% markups across the board every year regardless of what inflation is doing. It is part of the reason we are where we are with hospital pricing. They are literally pricing themselves out of the market. This 5% increase will take the price to $136.50.
Max’s Retail Price For Lipid Panel = $136.50
This doesn’t include the blood draw fee since we need to pay the phlebotomist. But let’s not confuse things just yet. We will just stick with the lipid panel for today.
Since my insurance negotiates a lower price on my behalf, my lipid panel will come in at $95.17. This price for my lipid panel is a set fee, not based on the original out-the-door price. In other words, my insurance doesn’t care that the out-the-door price is $136.50, they negotiated with my hospital to set the fee at $95.17. This just happens to be about a 30% discount on the retail price.
Max’s Sale Price For Lipid Panel = $95.17
Since my lipid panel will be considered a
preventative preventive screening, my insurance will pay the full $95.17 even though I have a high deductible plan. If it didn’t fit into the preventive category, my insurance would send that $95.17 right to my deductible and have me pay it out of my own pocket.
Hospital Lipid Panel
It is important to understand if you are having the service done in a hospital setting. This can be a little confusing if your doctor’s office is remotely close to a hospital.
For me, I walk right out of my clinic, down the hall, and suddenly I am in a hospital lab. A lot of medical offices are strategically staged within walking distance to a hospital-based lab. The hospital might argue this is out of convenience for the patient. Others will argue the hospital is driving the lab test to a higher cost setting so they can capture a higher payment for the lab. You know, kind of like overpriced popcorn at a movie theater. The Max OOP recommendation would be to always ask about pricing before you get the test done no matter where it is. I don’t get popcorn at the movies without looking at the menu first.
The price for a lipid panel done in a hospital lab can range dramatically. I have personally seen this charged between about $40 up to $200, depending on the hospital. This is where we need to let price transparency and competition do its thing. National averages from 2018 suggest the average price for the 25th – 75th percentile would typically see the lipid panel priced anywhere from $91 – $224. The price at the 50th percentile in 2018 was about $137, so mine happens to be right at the market price.
Clinic Lipid Panel
If the medical office draws the blood and bills for the test themselves, we will usually be looking at lower pricing. In 2018, the 25th percentile price for the lipid panel came in at around $45. The 75th percentile came in at around $100. Since the test is being done in the clinic/reference lab and not the hospital setting, we will often see lab pricing come in less for the exact same service. Some of the time, the reference lab will even do the billing separately.
What Does Medicare Pay?
This is where I can get people fired up about cholesterol pricing. For most providers of this service, Medicare sets the 2019 price for the lipid panel at a whopping $14.88. There is that problem gap again. We saw it with the hernia repair surgery as well. My insurance pays $95.17 for the exact same test Medicare would pay $14.88 for.
$95.17 (My Insurance) – $14.88 (Medicare) = $80.29 (problem gap)
Let me repeat that. If I was age 65+ and on the Medicare program, Medicare’s 2019 national price limit is most likely $14.88, regardless of the out-the-door price. We are talking about pricing power here that Walmart doesn’t even have. Medicare has a nicely organized lab fee schedule you can download here. It shows the CPT code and the price Medicare would pay for most lab services. I pulled out the lipid panel for everyone to see.
How Does Medicare Set These Lipid Panel Rates?
What is interesting about these prices is most of them are derived from the weighted median private insurance payer rates. In other words, Medicare is peeking in at what everyone else is paying and making their price the average of that. Medicare started sampling these private insurance prices in 2017. They used this sample to determine their pricing effective 1/1/2018.
This is all in accordance with the ‘Protecting Access To Medicare Act of 2014’ that was signed into law back in April 2014. So my take away from this is if the hospital, clinic, or reference lab price is way off the Medicare price, Max OOP wants to know why. If my insurance isn’t negotiating my price down closer to this rate, they aren’t doing a very good job negotiating. I am not saying it is ever going to be practical to get a lipid panel through our insurance at the rock bottom price of $14.88, but we need to start asking questions about these pricing gaps. Questions lead to pressure, pressure leads to change, and change leads to natural progress.
Currently, Max doesn’t fight these battles with my own healthcare services because I am still working in the industry.
Back in 2017, before Medicare made this pricing change, Medicare was paying around $18.00 for the lipid panel depending on the state. So either way, we have a pretty significant gap here.
If anyone out there believes I am misinterpreting anything, don’t be afraid to speak out in the comments. We all want to learn from this crazy system. Although it is rare, I love being proved wrong because it always means I am learning something.
In some cases, a lipid panel will not be considered a preventative preventive screening and we won’t get it for free. We need to plan on understanding pricing on this test so we can plan for our out-of-pocket lipid panel cost.
There is some baseline pricing above, and if our lipid panel cost is way off the market price, it is worth calling our lab provider out on it. If we feel we are being overcharged, pulling the Medicare price into the conversation with the billing department can really make things awkward. If we go as far as referencing the ‘Protecting Access To Medicare Act of 2014’ as a negotiation tactic with the billing office, we might break the whole system.
Max Out of Pocket for my lipid panel test? Probably about $100.