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Post date: June 25 2003

Laboratory Agrees To Stop Improper Patient Billing

Attorney General Spitzer today announced an agreement with the nation's largest provider of laboratory and other diagnostic testing services to reform its billing practices and provide restitution to consumers billed for services covered or already paid by health plans.

Quest Diagnostics, Inc. agreed to cease billing New York consumers for fees for tests that their health plans cover or have already paid.

"Consumers' out-of-pocket health care costs are high enough without being subjected to bills for procedures that are covered by their health plans," Spitzer said. "Health care providers should not put consumers in the middle of their disputes with health plans or force consumers to pay for their bureaucratic mistakes."

Under New York law and contracts that health plans have with most health care providers, a provider cannot bill a consumer who is properly enrolled in a health plan if the provider is a "participating provider" and the services received from the provider are covered under the plan. Exceptions to this prohibition are bills for deductibles, coinsurance and amounts designated by the health plan as the consumer's responsibility.

Spitzer's Health Care Bureau investigated complaints from consumers who received bills from Quest even though Quest was a "participating provider" with their health plans and the consumers received covered services. Spitzer's office determined that Quest improperly:

  • "Balance billed" some consumers by billing them for the entire balance of the bill when it had submitted a claim to the consumer's health plan but received no response from the health plan; and

  • "Double billed" some consumers for amounts their health plan had already paid Quest.

In addition the discontinuation of these improper billing practices, Quest also agreed to:

  • Reimburse consumers who were improperly billed and stop any current collection efforts against such consumers;

  • Maintain improvements to its computer systems, made subsequent to the start of the Attorney General's investigation, to ensure that payments are properly credited, thereby avoiding future improper "double billing" of consumers; and

  • Submit for review by the Attorney General's office all billing messages that Quest is using on its consumer billing forms.

Elizabeth Benjamin, Supervising Attorney of the Legal Aid Society's Health Law Unit said: "We have helped consumers who have received improper bills from Quest. With this investigation and agreement, Attorney General Spitzer has sent a strong message that health plan members will be afforded the protection guaranteed by state law and their insurance contracts by not being subjected to improper bills by health care providers. "

Quest Diagnostics, based in Teterboro, New Jersey, performs over one million tests each day nationally, and over 80,000 in New York State alone.

The investigation was handled by Assistant Attorney General John Powell and Albany Section Chief Troy Oechsner of the Health Care Bureau.

Consumers and providers with questions or concerns about health care matters can call the Attorney General's Health Care Bureau Hotline at 1-800-771-7755 (option 3).