Incentives matter: after back surgery, a routine urine test resulted in a $17,800 bill the patient was expected to pay

Originally published at:


This article buried the lede. Why can some dumbass lab in podunkville overcharge a patient 17k and Blue Cross plays no defense? That’s the real story. Those charges should never even leak through to the patient.


From the story: “Moreno’s surgeon would not discuss her urine test – why he ordered it and why the sample was tested for so many substances.”

Either the additional tests were not ordered by the surgeon, in which case Moreno has no obligation to pay, or the surgeon is getting a kickback from the lab. Her father should file a complaint with the medical board as well. Being a doctor himself, he should know exactly what buttons to push.


Quite right. It’s never been “insurance”, it’s “pre-paid health care” that covers some atomized list of stuff for an unknowable list of prices. If it’s not covered, the insurance companies don’t care. There’s plenty of price innovation where states are paying private MCOs to manage populations for some capitated price. “We’re going to give you $X to manage Y population – you do better than X, you keep X, you do worse, it’s on you.”


Seems it isn’t the first time this “company” has practiced overbilling:

A possible RICO violation.


Leak? I think you mean trickle down to the patient as a stream of expenses. I know that I’d be pissed, if I was in her situation.


Moreno’s father… settled with the lab for $5,000



Back in 2011, I had a large “benign” cyst removed from where it wrapped around half my thyroid gland. A week later, my surgeon called me in a panic; the cyst was in fact a very cancerous tumor and we needed to take the rest of my thyroid out immediately.

After that second surgery, I got a bill from an “assisting surgeon” that my insurance told me was “not in network” and therefore they wouldn’t pay his bill. I’d never met this man. I met the surgical nurses, and the anesthesiologist, and everyone else. He didn’t come introduce himself to me or my spouse. I wasn’t told that there were even OON doctors that might have a part in this surgery, so obviously I had no opportunity to reject them.

So here we are, perfectly innocent patients on the hook for something that we had absolutely no say in. Said surgeon reduced his bill to the “cash” price for me, but I still had to pay that one out of pocket.


In reading the story from the link, this is why: “Fearing damage to his daughter’s credit rating, Moreno’s father, Dr. Paul Davis, paid the lab $5,000 to settle the bill in April 2017.”


There’s a simple way to fix most of the out-of-network problem:

Congress mandates that network affiliation stems from the facility and is binding.

Your surgeon is in network, they bring in an assistant, that assistant is bound by the network agreement. The send a sample to the lab, the lab is bound by the network (the burden is on them to ensure it’s in network.)

The hospital is in network, every doc in the ER is bound by it even if they don’t work for the hospital.

(This would take Congress doing it because there will be a lot of pushback from the medical providers.)

We also need some pseudo-insurance. Mandate that all insurance companies offer inexpensive “insurance”–it works just like their other offerings except it has an infinite deductible, no included coverage. It never pays a penny for anything–but you get network pricing, network regulation of garbage charges etc.


If you think I was joking, urine for an ear lashing. I’m sick of all these people bladdering on and on about doctors and hospitals, when it’s the insurers taking the piss. You shouldn’t have to peed your case and do all the cleanup every time they miss their target.


Yep. And those are exactly the plans which make the most money by denying or delaying necessary care.


The fact that there’s no real recourse when these people rob you, not even arbitration, is insane. If an auto mechanic said: “you asked for an oil change, we did your brakes too, that’ll be $10,000” you clearly have choices other than just paying it. Why do you have to pay someone you never met or contracted with?


“Fearing that failure to submit to submit to licensed medical extortion would impact the potentially life-altering number assigned to his daughter by a group of powerful, unaccountable companies, Moreno’s father, Dr. Paul Davis, paid the lab $5,000 to settle the bill in April 2017.”


Seems obvious. Has it been legislated anywhere in the US? I can definitely anticipate an argument that the requirement would affect interstate commerce. I believe that Constitutionally, that means it would have to be a federal requirement.

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I represent whistleblowers in healthcare fraud cases. This stuff is not rare by any means. With the opioid crisis drug test and drug rehab fraud are the new hot areas for fraudsters. Not that this is necessarily fraud but this industry is a mess. I’ve seen cases where labs order tests for drugs that aren’t street drugs and we’re banned by the FDA decades ago (i.e. there is no reason to do it but to bill for it).

It’s worth noting that the lab is not necessarily the only one makes money in these arrangements. Typically doctors do not order unnecessary and expensive tests unless they get a kickback from the lab or have something else going on. Not saying that’s the case here but it sounds like the doctor ordered a facially bunk test. That begs the question: why?


I had surgery a few years ago and my doctor advised me which providers would negotiate for a lower rate, which would send unpaid bills to collections, and which ones wouldn’t. I followed his advice and paid some, negotiated with some, and stiffed some.

It was kind of surprising how many parties were involved in a relatively routine surgery. There was the surgeon, the surgery center, the anesthesiologist, the radiologist,an after-care nurse, and maybe others I don’t even know about.


Why is a medical doctor ordering a drug test on a patient? That’s insane. I’d tell the Doc to fuck off.


Price-gouging is built into the current system. Hospitals, doctors and labs routinely bill up to 10x the usual cost for insured patients. You have insurance, they settle for what the insurance pays. You don’t have insurance or are out of network, they will try to stick you with the whole thing. It is a crazy system and by and large the people it sticks with huge bills are the least able to pay them. I am not sure it is fixable except by going to single payer/universal coverage where there is no out of network and there is nobody uninsured, but it might be possible to legislate some limits, short of that.