Confusion aboutcoverage of cost sharing has led to a pileup of would-be surprisemedical bills waiting to be sent out. (Photo:Shutterstock)

Hospitals around the country are afraid to send out hundreds ofthousands of bills related to COVID-19 testing. That's becauseCongress mandated there would be no copays and no out-of-pocketcosts for patients. But many employers with self-funded healthplans seem to believe they're exempt from the rules.

When testing kits were still scarce, Vanderbilt UniversityMedical Center in Nashville, Tennessee, fired up its clinical labs.It almost single-handedly took over testing in much of Tennessee.Other health systems didn't even try to compete, although the testswere supposed to be covered by insurance.

Related: Coronavirus testing and care: self-funded healthplan considerations

In late March, Congress passed two laws, the Families First Coronavirus Response Act and the CARES Act, thatessentially stated that not only does testing have to be covered,but patients shouldn't have to pay a dime. Yet VUMC has foundthat's frequently not the case.

"As many as half of those patients potentially have someout-of-pocket [cost], either for the tests or for companionservices with the test," VUMC Chief Financial Officer Cecelia Mooresaid.

VUMC is holding back bills for these patients, Moore said,rather than face a backlash of anger at surprise billing during thepandemic.

The issue comes down to an interpretation of whether the newfederal legislation applies to health plans offered by largeremployers. Those companies, which usually have at least a fewhundred employees, often use their own money to pay claims as a wayto drive down costs. A survey by the Kaiser Family Foundation finds a majority ofAmericans with health coverage are in this type of plan.(Kaiser Health News is an editorially independent program ofthe foundation.)

So BlueCross BlueShield of Tennessee may be on an employee'sinsurance card, but the insurer is just managing the payments. Theemployer's money pays the claims; these plans are often calledself-funded or self-insured, and it may not be clear to employeesthat they are in such a plan.

According to multiple sources, many of the companies with thoseplans are operating as if they're exempt from the new federalrules.

"In this case, it appears that the law may have leftself-insured employers out of certain elements," said MikeThompson, CEO of the National Alliance of Healthcare PurchaserCoalitions.

The National Alliance represents employers with self-fundedhealth plans. He said some are not waiving copays and other bills.Most are, he said, though sometimes only bills for the COVID-19test itself and not for the doctor's visit or the test to rule outthe flu.

"Many of them have opted to cover on a first-dollar basis, butin different ways. They may or may not have included the relatedtreatment elements," Thompson said. He acknowledges the distinctionwould be lost on patients. "I get why it's causing confusion."

Other associations representing employer-funded health plans,including the Business Group on Health, said their members aregenerally following the spirit of the law.

Health policy experts don't see any room for interpretation.

"It doesn't matter if it's a self-funded plan or a fully insuredplan, if you get it from a small employer or a large employer, ifyou buy it on your own in the marketplace," said Karen Pollitz, asenior fellow with KFF. "All private insurance has to cover 100% ofthe cost of COVID-19 testing."

Pollitz said she is miffed that employers are trying to argueotherwise.

Still, it's happening, and not only in Tennessee.

Duke Health in North Carolina confirms it's not billing claimsrelated to COVID testing or treatment, citing a lack of clarity inwhat the patient is responsible for paying. In California, UCSFMedical Center is also holding off on billing, and UCLA MedicalCenter is pressing health plans to pay their part.

"UCLA Health does not bill COVID-19 patients for testing even iftheir health plan erroneously does not pay," spokesperson EnriqueRivero said in a written statement. "Our practice is to notifyinsurers of their error and request that they reprocess claimsconsistent with CARES Act guidelines."

NYU Langone Health and Cleveland Clinic said they won't billpatients any cost sharing for testing, even if that means they haveto bear the cost.

The issue extends beyond academic medical centers. EnvisionHealth, a Nashville-based firm that staffs and operates hundreds ofemergency rooms around the country, is holding back 200,000 billsrelated to COVID-19 testing because of confusion about coverage ofcost sharing.

So, many would-be surprise medical bills are still waiting to besent out. At Vanderbilt alone, the medical center has held backmore than $6 million in billing since mid-March.

"I know I'm supposed to be shaking everybody down, but we're notright now," said Heather Dunn, VUMC's vice president of revenuecycle services.

Given the growing disdain for surprise medical bills, sheexpects a backlash from vulnerable patients.

"My greatest fear is [for] patients who are already sufferingfrom the COVID virus or issues after or have lost their job. I'mhesitant to also say, 'Your insurance company has passed along this$50 copay,'" she said.

Sometimes, the patient is also left with a large deductible topay, in the hundreds of dollars.

Dunn said that she can't delay billing forever and that justbecause the tests are supposed to be free to patients doesn't meanthey have no cost.

This story is part of a partnership that includes WPLN, NPR and Kaiser HealthNews. Kaiser HealthNews is a nonprofit news service covering healthissues. It is an editorially independent program of the KaiserFamily Foundation, which is not affiliated with KaiserPermanente.

Read more: 

• COVID-19 testing may play a central role in manyemployers' return-to-work strategy
• Short-term health insurers expanding COVID-19testing coverage
• Some 'excepted benefits' policies might coverCOVID-19 testing