BCBS Sues Again COVID Testing Lab

Another Blue Cross and Blue Shield insurer on Thursday sued GS Labs over COVID-19 testing, alleging that the national testing center forced commercially insured customers to undergo unnecessary and costly tests to deprive Premera Blue Cross of $ 26 million.

The lawsuit, filed with the US District Court for the Western District of Washington in Seattle, is the second complaint against a testing company in Omaha, Nebraska. In July, BCBS Kansas City accused GS Labs of trying to cash in on the public health crisis by demanding $ 9.2 million from a nonprofit insurance company for COVID-19 tests. GS Labs responded with a counterclaim against BCBS Kansas City, accusing the insurer of “legal bullying,” by filing a surprise action to keep the company from paying approximately 34,600 member claims. The case is pending.

At the time, insurance company lobbying group AHIP said BCBS Kansas City’s claim represented the first insurer’s complaint in the country. The Advocacy Group said it was unaware of any other lawsuits against testing vendors other than GS Labs, which are also facing issues from state regulators. GS Labs said its prices reflect more than $ 100 million invested by its owners in the construction of the test facility, a company spokesman wrote in an email. The company is partially owned by Gabriel Sullivan, who is facing an ongoing lawsuit from a previous healthcare employer that accuses him of improper billing of insurers. A GS Labs spokeswoman said it conducts “one in four or five” COVID tests in Washington every day.

“Premera is making record margins and accumulating record billions of dollars in reserves and is now looking to shut down one of the largest COVID testing providers in the state,” the spokesman wrote. “While Big Insurance is committed to putting communities at risk with this dangerous litigation, it won’t stop us.”

Like BCBS in Kansas City, Premera Blue Cross requires a declarative court order that prevents the insurer from paying 80,000 claims related to coronavirus testing conducted by GS Labs, which operates 27 locations in 13 states. The Coronavirus Relief, Assistance and Economic Security Act requires insurers to cover testing without cost sharing during a public health emergency and instructs insurers to pay out-of-network providers their specified amount in cash. However, the law is silent on how much a health plan must pay if it cannot negotiate an agreed rate with a health care provider.

GS Labs charges about 10 times what Medicare reimburses doctors for taking a COVID-19 antigen test, and twice as much for more complex PCR tests, the complaint said. Fifteen percent of US hospitals charge similar rates, April analysis Kaiser Family Foundation found. In June, the insurance lobbying group AHIP reported that insurers across the country were “driving up prices” due to off-chain COVID-19 testing centers that conduct more diagnostic, antibody and antigen tests than ever before. Meanwhile, GS Labs accepted cash payments from consumers up to 70% of the amount charged by insurers.

The complaint says that in addition to the “extremely high rate it demands” from insurers, GS Labs also ran several unnecessary tests on one person to make as many claims as possible to insurers. In order for commercially insured people to make an appointment online, they must agree to receive a rapid antibody, antigen and PCR test, the lawsuit says. Meanwhile, out-of-pocket patients must select a specific test to make an appointment.

“Because GS Labs hides this information in the linking agreement, patients are often unaware that they have agreed to this unusual term,” the lawsuit says.

The insurance company also claims that GS Labs’ delay in processing testing has exacerbated the public health crisis. In one case, the company did not communicate its results to consumers for two weeks, resulting in a person who tested positive “walked with COVID for a week,” potentially spreading the virus, according to reporting on KCTV.

Premera isn’t the only group questioning the pricing of GS Labs, owned by Omaha, a Nebraska-based City Ventures developer.

In December, the Kansas Insurance Department launched an investigation into a GS Labs facility that charged $ 1,000 for tests, which was above average, the state attorney general said.

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