DENVER (KDVR) — COVID-19 testing is free for most of us but not for your insurance company. It turns out insurance companies are billed at a much higher rate than individuals who pay out-of-pocket for the same service.

That might not bother you if you have insurance since most insurance companies don’t even require a co-pay, which means no out of pocket costs but it bothered Scott Fitzgerald.

“Because I really do think it is money out-of-pocket because I think that my insurance company is getting treated unfairly,” said Fitzgerald.

The local real estate agent got tested in the parking lot of a former K-Mart at S. Monaco Parkway and Evans Avenue. The drive-up testing site is operated by a local doctor’s clinic called Women’s Health Group, under the name COVID-19 Drive-up.

Fitzgerald was shocked when he saw his insurance company CIGNA was billed $787, “I just about fell out of my chair.”

The Medicare reimbursement rate for a nasal swab COVID-19 test is $100 dollars but there’s no law that caps what a private facility can charge an insurance company.

Insurance companies won’t pay whatever a facility asks for but generally insurance companies pay more than a medical facility charges a private paying person based upon contracts medical facilities have agreed to, in order to accept reimbursement from an insurance company.

In the case of Scott Fitzgerald, his $787 bill was the combination of five separate charges.

A $277 physician fee, that’s the office visit, in Scott’s case the parking lot is considered a medical office. People without insurance pay $95 dollars for the physician fee.

Then Scott’s insurance was charged $150 dollars for the antibody test, to see if he had COVID-19 antibodies from a past infection. Someone without insurance would’ve been charged $45 dollars for the same antibody test.

Then CIGNA insurance was billed $300 for the nasal swab test to see if Scott Fitzgerald had an active infection. A person with no insurance would’ve been charged $85.

Then COVID-19 drive-up charges insurance companies $30 for what the bills calls an OB/GYN Fee. FOX31 was told that’s to cover the costs of handling the specimens.

And finally, COVID-19 drive-up charges insurance companies a separate $30 lab fee to cover staff PPE, personal protection equipment like medical gowns and masks.

Private pay individuals are not asked to cover the last two fees so for the same service an individual would be charged a total of $225 versus the $787 that CIGNA was billed on behalf of Scott Fitzgerald.

CIGNA negotiated the $787 bill down to $397 but that’s still nearly twice what a person paying out-of-pocket would’ve been asked to pay.

“If you charge my insurance company outrageous rates they in turn are going to turn around and pass that onto me the consumer and raise my premiums,” said Fitzgerald. 

The trade group known as AHIP or “American’s Health Insurance Plans” has released a fact sheet that states “price gouging in COVID-19 testing is a significant problem” especially if your insurance is considered out of network.

“I just kind of felt like this company and this physician and his partners are taking advantage. I think they’re being opportunistic,” said Fitzgerald.

But Dr. Steve Volin, who operates the drive-up testing site Scott used, disputes he’s taking advantage of anyone.

“So far we haven’t made any profit on this business,” said Dr. Volin, who argues he’s increasing access to as many people as possible and charging people without insurance the bare minimum to cover his costs.

“By running an outdoor drive-up testing site we are able to keep people out of the emergency room and therefore we feel we are reducing health care costs,” explained Dr. Volin.

He said he’s not gouging insurance companies but charging them more because insurance companies take 60 to 90 days to reimburse claims and reimbursement rates vary.

“There’s a significant number as much as 20% that never get paid at all. Claims that get filed with certain types of insurance companies reimburse at such a low level that it costs much more than what we actually receive,” said Dr. Volin, who added, “We made it a policy to never go after people for balances.”

To some extent, Volin acknowledges insurance companies help subsidize the price for people who don’t have insurance so they can pay less for the same service.

“There’s always unscrupulous people out there but we’re a mission based organization and I hope people will find that the bills and results meet their needs and people don’t consider it unfair,” said Volin.

Dr. Volin said he works with in-state labs to ensure his patients get faster COVID-19 results, usually in a day or two after taking the test.

The state of Colorado does offer a number of truly free testing sites that won’t even ask if you have insurance.

 You can find a location by clicking on this link.