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Free COVID-19 testing opens up potential for fraud

HHS Office of Inspector General has issued a fraud alert over COVID-19 scams.

Susan Morse, Managing Editor

Photo by Quinn Rooney\Getty ImagesPhoto by Quinn Rooney\Getty Images

One area ripe for fraud is in COVID-19 testing, according to a data expert who works with health plan sponsors.

Fraudulent testing providers are taking advantage of the emergency rule that says COVID-19 tests are covered, according to Eileen Flick, director of Health Technical Services at Segal, an employee benefits consulting firm. 

The federal government requires plans to pay for testing without charging for cost sharing during the public health emergency. A COVID-19 test is free to patients and health plan members. It costs the insurer or government about $100. 

But in some cases, $500 in extra fees is added to the test for doctor visit charges, Flick said. In another case she investigated, an extra $2,400 was being charged to a multi-employer health fund. The COVID-19 molecular RT-PCR test was supposed to cost $100 and the antibody test $150. 

"Turns out this out-of-network tester frequently ordered unnecessary multi-panel tests, and the fees ran $2,500 per test," Flick said. "We've been monitoring testing. There are some fraudulent providers that are taking advantage."

The total cost of a COVID-19 test is about $80, but rising steadily, going up to $90 or $100, she said. 

One employer in the Northeast was hit with high costs after a large number of employees showed up to get tested for COVID-19. The test itself was about $100.

But for every other patient, the clinic ordered large, multi-panel tests to look for respiratory diseases that should only be used for patients who are critically ill or immunocompromised, Flick said. The lab used was out-of-network. The average cost of the panel test was $1,500 per person. The fraud investigation is ongoing.

Other clients are being charged $400 to $500 for phone calls to reveal the results.


This type of fraud is not the norm, but it occurs, Flick said. Anyone who is a plan sponsor or who is managing benefits should be looking at spikes in claims. 

Consumers have the risk of getting a surprise medical bill.

"It really should not cost a patient, but patients should be aware of the potential for surprise billing," she said.

Flick recommends that consumers ask what they are being screened for and the cost of the test.

Plan sponsors should keep an eye out for price padding, particularly from smaller providers, because recent abusers have typically been small labs that often partner with standalone urgent care centers. 

She also recommends keeping track of federal regulations, as abuse of the system may end free COVID-19 testing for the patient. 

"The regulatory situation can change at any moment," she said, "and people may have to start paying out of pocket, even for in-network providers." 


On Monday, the U.S. Department of Health and Human Services Office of Inspector General alerted the public about other fraud schemes related to COVID-19.

Scammers are using telemarketing calls, text messages, social media platforms and door-to-door visits to get personal information.

They are offering COVID-19 tests, HHS grants, and Medicare prescription cards in exchange for medical and Medicare information, which is used to fraudulently bill federal healthcare programs and commit medical identity theft.

Twitter: @SusanJMorse
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