Making Labs and Imaging Affordable

How does lab billing work at Fishtown Medicine?

At Fishtown Medicine, every lab and imaging order is written with standard, appropriate insurance billing codes, the same codes any physician would use. That matters, because it means 2 paths are open to you, and you can choose whichever is cheaper:

• Through insurance. Because the codes are correct, most labs process through your plan and apply toward your deductible like any other covered service.
• Through cash pay. For members, we pass along the deeply discounted rates our lab partners give us. On advanced panels, that discount is often 90% or more off the list price.

You are not locked into one route. In fact, for a lot of the advanced testing we do, the cash-pay path is dramatically cheaper than running it through insurance, even when you have coverage.

Why is cash pay often cheaper than insurance?

Cash pay is often cheaper than insurance because the "list price" a lab bills to insurance is not the true cost of the test. Labs quote a high number to insurers, insurers negotiate a discount (often around 70%), and you pay your share of whatever is left against your deductible. When a physician orders the same test at the direct cash rate, the discount is frequently 90% or more, because there is no billing overhead and no negotiation in the middle.

The math shows up most on advanced panels. A full workup, advanced lipids, a full hormone panel, metabolic and micronutrient testing, might bill around $800 to $1,000 through insurance. The same tests through cash-pay pricing often land somewhere near $300 to $400. For routine labs the gap is smaller, but for the deeper testing that drives a plan, it is substantial.

Can cash-pay labs still count toward my deductible?

Yes, in most cases a cash-pay lab receipt can be submitted to your insurer and applied toward your deductible and out-of-pocket maximum. This surprises a lot of people, because the common assumption is that a test has to be billed directly by the lab to "count." It does not. Because we use proper billing codes, you can typically submit the itemized receipt to your plan, and it goes toward your out-of-pocket total, not as a reimbursement check back to you, but as credit toward the deductible you are trying to meet anyway.

One honest caveat: whether a submitted receipt applies depends on your specific plan administrator, and administrators vary. The insurance company, the plan administrator, and the pharmacy benefit manager are sometimes 3 different entities that do not talk to each other cleanly. For most of my patients this works smoothly because the codes are right, but it is worth confirming with your own plan. We give you a properly coded, itemized receipt either way.

What if I have a high-deductible plan (HDHP)?

High-deductible health plans are where this approach pays off the most. If you are choosing between plan options and expect to pay out of pocket until you hit a deductible regardless, the practical move is usually the high-deductible plan with the lower out-of-pocket maximum. You are going to pay out of pocket early either way; the only question is whether you pay through a high monthly premium or through the cost of care, and the cost-of-care route is almost always cheaper overall when paired with cash-pay labs.

Here is the strategy I walk members through:

1. Route the labs through cash pay to capture the 90%-plus discount up front.
2. Submit the itemized receipt to your plan so it credits toward your deductible and out-of-pocket max.
3. Once you hit your deductible, insurance starts covering, and we route accordingly from there.

If you use a health savings account (HSA) or flexible spending account (FSA), cash-pay labs are a qualified medical expense, so you can pay for them with pre-tax dollars. See our HSA and FSA guide for the details.

How Fishtown Medicine keeps testing affordable

The reason this works at all is the membership model. Because we are not billing insurance for the visit itself, there is no incentive to order for insurance's sake, and every ordering decision can be made purely around what gets you answers at the lowest cost.

• We quote before we order. If a panel is expensive, you know the cash and insurance numbers before anything is drawn.
• We route each test the cheaper way. Sometimes that is insurance, sometimes cash, and it can differ test by test within the same order.
• We give you a properly coded receipt. So the deductible submission is clean.
• We never pad the order. You get the tests the plan needs, not a longer list that pumps up a bill.

"My background is evidence-based internal medicine, so I start with the right tests and the right codes. Then I pass my discount straight through. The goal is never to bill more; it is to get you the answer for the least money possible." - Dr. Ash

Scientific References

1. Robinson JC, Whaley C, Brown TT. Association of Reference Pricing with Prices, Use, and Spending for Laboratory Tests. N Engl J Med. 2016;374(11):1027-1035.
2. Song Z, Wallace J. Price Transparency and Variation in Health Care Services. JAMA Intern Med. 2018;178(9):1257-1258.
3. Internal Revenue Service. Publication 502: Medical and Dental Expenses (qualified expenses for HSA/FSA).

Dr. Ash is a board-certified internal medicine physician specializing in preventive medicine and healthspan optimization at Fishtown Medicine in Philadelphia.

Related at Fishtown Medicine

• Using an HSA or FSA for Preventive Care - paying for care with pre-tax dollars
• Managing Labs and Imaging With Ease - the practical path from order to result
• Membership Pricing - what membership includes and how billing works
• The Neck Lump That Comes and Goes - an example of getting an ultrasound affordably