Anthem pushes hospital labs to slash rates

Anthem Blue Cross in Indiana has pushed hospital-based laboratories in its provider network to dramatically cut their negotiated rates or find themselves competing against much lower-priced providers.

In what appears to be an exercise in greater price transparency, Anthem has been able to persuade 63 hospitals in Indiana to cut their negotiated fees for blood and tissue testing by 50 to 80 percent in order for them to remain part of the insurer's reference laboratory network, the Indianapolis Business Journal reported

The providers that have agreed to go along with this price reduction are Eskenazi Health and the Indiana University Health hospital systems, and a few sites operated by Franciscan St. Francis Health, according to the Business Journal.

"The hospitals and the other higher-cost providers certainly can stay with the contracted rates we have with them,"  David Lee, M.D., Anthem's vice president of provider engagement and contracting, told the Business Journal. "But they are increasingly likely to see patients go elsewhere if they stay with their contracted rates. That was basically the discussion we had with them."

The reduced charges will be posted on Castlight Health and other websites that are promoting price transparency among providers. They will also be promoted by the UAW Retiree Medical Benefits Trust, which has about 15,500 enrollees statewide.

The price differences could be stark, as tests that may have cost $400 with a 30 percent patient co-pay could drop to as low as $45 with a $4.50 patient co-payment, according to Anthem. The insurance company said in statement that it created the network in order to counter widely ranging prices for laboratory services, such as blood testing in California that could cost anywhere from $10 to $10,000, depending on where it is performed.

The initiative will only increase pressure on laboratory operations, which have already seen steep cuts in reimbursement, and have led some hospital systems to sell their outreach operations.

To learn more:
- read the Indianapolis Business Journal article 
- check out the Anthem statement