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Comment by Thriptic | Hacker News Reader

Lab tests are particularly complicated to price because usually they are being processed by someone else. Usually labs won't even try to get an authorization from insurance until they get your sample and start working on it as it affects their turnaround time which is one of their main differentiators, and each insurer will have different rules about what they will pay for under what conditions (insurers also have separate deals with each individual hospital and potentially individual doctors or groups of doctors). The short answer is they can't tell you because they don't know.

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None of this has anything to do with lab tests, which are an absurdly routine procedure. It's entirely divorced from the subject matter. It's not "complicated" out of necessity, but for profit.

I'm not justifying the situation, I'm simply saying this is how it works which is why the situation plays out how it does.

Routine != Simple

Frequency and complexity are not mutually exclusive. The pricing structure reflects the diverse system of payers (insurance companies) and has time-based complexity (i.e. bundling) that prevents payment cost structure from being calculated up front.

> The short answer is they can't tell you because they don't know.

Bingo. My partner works in revenue cycle management (arguing with insurance companies to pay their bills) for a large hospital chain, and even she can't get accurate prices for procedures. She can walk down the hall to the finance department, and ask them, but even they can't figure it out.

I found this out after asking her why they don't prioritize cases with the largest bills, and she said it's because the billed price of the procedure has no relation to the actual priced paid. They could review a $800,000 cancer case and only recover $750.

> Bingo. My partner works in revenue cycle management (arguing with insurance companies to pay their bills) for a large hospital chain, and even she can't get accurate prices for procedures. She can walk down the hall to the finance department, and ask them, but even they can't figure it out.

That's because they are not properly incentivized. It is very simple to solve this problem: charge them with fraud. Same way as a doctor who overbills Medicare would be charged with fraud.

We had this kind of things before Enron - CEOs pretended that they cannot possibly know if the numbers in the accounting documents were correct because it was oh so complicated. Now, however begrudgingly, they do sign off on the books and since they are personally responsible they have all the needed incentives.

This is one of the reasons that medical pricing is out of control. If nobody knows the pricing for anything, how can anybody (not just patients, but anybody else involved with the system) make rational decisions?

I worked in lab EHR software and can say this is the correct answer. Lab pricing is particularly complex and is not like buying a hammer or a pedicure.

There was a separate billing module that calculated pricing for individual procedures based on a number of factors, such as insurance provider, diagnosis codes, performing lab, urgency, etc. along with a whole set of separate rules for medicare/medicaid patients. Even the timing of drawing blood (relative to other procedures) was factored in for insurers.

Transparency isn't going to help much here when the problem is the complexity created by multiple payers.

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