What is the hook effect in regards to pregnancy testing and why does it occur? Would it effect a blood test?

Yes. A very rare cause of false negative results occurs when very, very, high concentrations of HCG are present. This is called the high-dose hook effect. Urine and blood can be negative. Diluting the urine and/or getting an ultrasound can confirm pregnancy. http://www.pregnancylab.net/2011/05/false-negative-pregnancy-tests.html.