Patient Paid $48,329 to the Doctor After an Allergy Test. What Went Wrong?

Despite Janet Winston’s best efforts, she was plagued with a severe rash.

Prof. Eureka, a native of Eureka, California, has always had an allergy to the chemicals in skincare and cosmetics. The chronic rash was worsened by the antifungal medication given by her doctor. Do you think it’s the same thing?

That’s why Winston, a 56-year-old Humboldt State University employee, had no choice but to make an appointment with her local dermatologist months in advance. Because of this, she drove almost six hours south to Stanford Health Care, where she often goes for specialist therapy. After years of avoiding lipstick and other skin products, she wanted to finally get her rash under control and discover what else she could be sensitive to.

Over three days, Winston claimed, allergens in the form of 119 little plastic vials were glued to her back. For example, Winston found out that the metals gold, nickel, cobalt, and the ketoconazole lotion were recommended for treating her recurrent dermatitis, including linalool (a chemical found in lavender, other plants), which she was allergic to.

Winston’s Stanford-affiliated doctor had cautioned her that the rigorous allergy skin-patch testing she required might be pricey, but she wasn’t too concerned, he said. Winston agreed. Even though Stanford was an in-network provider for her insurance — a perk she received as a state employee — her insurance has always been trustworthy.

After that, the bill arrived : .

Professor of English at Humboldt State University, Janet Winston (56), of Eureka, Calif.

Winston’s doctor’s visit cost Winston $848, which was included in the $48,329 bill. Stanford received $11,376.47 from Anthem Blue Cross, Winston’s health insurance. For her 20% share of the agreed amount, Stanford charged Winston $3,103.73.

Outpatient dermatology clinic in Redwood City, Calif.: Dr. Golara Honari of Stanford Health Care

Allergy skin patch testing was performed on Winston to identify the compounds that caused his contact dermatitis or rashes.

Although he was appreciative of the excellent treatment at Stanford, Winston was appalled by the fee. … I was spared any harm. I had no anesthetics. My back was wrapped with plastic containers half-opened and half-full of fluid.

According to medical billing experts at Kaiser Health News, Stanford’s costs for Winston’s allergy patch test seem to be high. After hearing that Winston’s insurance company Anthem Blue Cross paid Stanford over $11,000 for the therapy, they were startled.

On the other hand, Stanford charges $399 per allergy on its advertised price.

As a former Indiana University professor of health informatics and a medical coding and billing expert, Margaret Skurka said that the price is “astronomical and insane,” according to a press release. She examined Winston’s bill.

According to an expert witness in medical billing from San Francisco named Michael Arrigo, it costs around $35 to test for one allergy in the expensive San Francisco Bay Area. He also looked at Winston’s bill. According to the evidence, the fees levied in this instance are excessive.

To give private insurers an idea of how much doctors charged for allergy skin-patch testing like Winston’s, Medicare payment data shows that in 2016, the average amount physicians reported to the program was $16 per allergen.

The bill was reviewed by an Anthem examiner, according to an Anthem spokeswoman, but he couldn’t confirm if it were given further attention because of its high cost. An emailed comment from Eric Lail said, “We attempt to strike a balance between safeguarding cost and allowing a wide network of providers to generate options.”

Winston’s story shows how some health care professionals charge outrageous fees since they know they will be paid less in the long run. “chargemaster” or list prices, which patients seldom pay, might make headlines like the $100 aspirin. For insurers and patients alike, list prices serve as a starting point for bargaining and reductions that eventually lead to lower out-of-pocket costs for consumers.

Aside from working with insurance companies like Anthem Blue Cross, Stanford Health Care has a lot of leverage. Hospitals and clinics in the San Francisco Bay Area and other significant medical practices are all part of the academic medical system. Consolidation and market dominance may lead to a rise in health care costs. Stanford’s high expenses have long been a problem for insurers in the area, who have excluded the health institution from their networks. There are several reasons why insurers may not want to exclude Stanford from their networks, but Stanford’s size and reputation as a medical powerhouse in the Bay Area make it difficult for them to do so.

Health care costs for both patients and insurers have increased due to this consolidation in California, according to a report published in the journal Health Affairs.

According to Stanford Health Care spokesperson Patrick Bartosch, Winston’s doctor used bespoke patch tests rather than off-the-shelf ones. According to him, the university’s health system maintains its extensive allergy bank.

We did a thorough study of the patient and her environmental exposures and methodically selected and prepared potential allergens individually,” Bartosch said in an emailed statement.

Extensive healthcare systems, such as Stanford’s — which owns numerous hospitals and outpatient clinics — may compel insurance companies to make large payments, said Harvard University health care economist Leemore Dafny.

Often, “insurers roll over and pay the charges,” she added. “Everyone likes to point fingers at the providers,” she said.

In other words, Stanford overcharged Winston’s insurance by $48,000 because it could.

Resolution: Winston paid $1,561.86 out of pocket after some haggling with Stanford’s billing department. According to her doctor, the cost per allergy would be under $100, not even close to the $400 Stanford finally charged her insurance. She presented this argument to support her claim.

Many insurance companies advise people to look around for the lowest price and only to use doctors who are in their network to prevent unexpected costs. Winston followed all the rules, yet he was still taken by surprise. For her, Stanford was an in-network provider since she worked for the state. A doctor had advised Winston that the test would be pricey, but she had no idea it would cost over $50,000. “Expensive” and “cheap” may imply quite different things in the high-cost American health care system, so don’t hesitate to ask for exact statistics.

Winston’s doctor recommended she contact Stanford’s billing department to dispute the costs in advance. So she did, and Stanford awarded her a reduction of roughly 50% on her portion of the charge for coinsurance. Asking a question is never a bad idea.

The allergy patch tests cost insurance policyholders and taxpayers more than $12,000, which Stanford collected from Winston and her insurer. According to researchers, Stanford and Sutter Health’s merger in Northern California has been related to more significant health care expenses for the region’s residents. A local health workers’ union has also targeted Stanford’s prices with two municipal ballot proposals in Palo Alto and Livermore that seek to limit what Stanford and other health providers may charge consumers.

We were thankful for our insurance coverage and that we could pay the [final] cost because of it being in-network. Conversely, I wondered: ‘How are they getting away with this?’ ” At least at this hospital, most Americans could not afford this surgery, and it reminded me of the grand piano in the foyer.”