Kansas City-based Blue Cross and Blue Shield are suing the national COVID-19 testing center, alleging that GS Labs deliberately inflated its cash prices and performed unnecessary coronavirus tests in an attempt to steal $ 9.2 million from a nonprofit insurance company.
Insurance lobbyist group AHIP said BCBS Kansas City’s claim represents the country’s first payer complaint against a coronavirus testing provider.
The insurer’s lawsuit is due to the Washington, DC-based power plant reporting that payers nationwide are “jacking up prices” due to off-chain COVID-19 testing centers doing more diagnostic tests, antibody and antigen tests. than ever. AHIP found that out-of-network doctors performed 27% of coronavirus tests in March, up 6% from last April. The number of these providers charging at least 50% more than the business average for COVID-19 tests has doubled since the start of the pandemic, with 36% of out-of-network doctors rate tests higher than standard, AHIP reported.
“GS Labs is deliberately engaging in an illegal scheme to exploit the COVID-19 pandemic by tricking health insurance companies into paying thousands of applications for COVID-19 diagnostic tests at grossly inflated rates,” the Kansas City BCBS lawsuit said.
BCBS Kansas City’s complaint filed with the U.S. District Court for the Western District of Missouri on Wednesday requires a declarative judgment that will prevent BCBS Kansas City from paying nearly 29,500 claims related to coronavirus testing conducted by GS Labs, Omaha, Nebraska Testing Center at domain base. About 30 clauses across the U.S. The Coronavirus Assistance and Economic Security (CARES) Act requires insurers to cover testing without cost sharing during a public health emergency and requires insurers to pay off-chain providers of their listed cash prices.
GS Labs is an off-chain service provider for BCBS members in Kansas City and charges about 10 times what Medicare reimburses doctors for COVID-19 antigen test, or $ 380, the lawsuit said. The lab charges twice as much for more complex PCR tests, or up to $ 979, according to the lawsuit. Meanwhile, GS Labs accepted cash payments from consumers for a small fraction of the amount charged by insurance companies.
The complaint says that in addition to issuing “unreasonable, high claims for reimbursement” to insurers, GS Labs also performed several unnecessary tests on one person in order to submit as many bills to BCBS Kansas City as possible. If BCBS Kansas City pays for the claims filed by GS Labs, the higher prices will eventually pass to its members, the lawsuit says.
“Cash prices published by GS Labs and claims for these prices amount to illegal overpricing and speculation,” the complaint said.
In addition to evading payment of GS Labs claims, BCBS Kansas City also seeks to prevent the laboratory company from invoicing its members, which will result in “hundreds of thousands of complaints, appeals and substantial and unnecessary administrative burdens,” the lawsuit says – and any other remedy protection that the court considers just.
BCBS isn’t the only group questioning GS Labs’ pricing.
In December, the Kansas Insurance Department launched an investigation into a local institution owned by GS Labs, which charged $ 1,000 for tests, which the state agency’s general counsel said was above average. GS Labs did not immediately respond to an interview request.