On Thursday a case was filed in the Western District of Washington by Premera Blue Cross against GS Labs. The case is alleges fraudulent billing and price extortion regarding COVID-19 testing services provided under the CARES Act.
The CARES Act, passed in the early months of the COIVD-19 pandemic, mandates that in the absence of an agreement to other rates, health insurance companies reimburse laboratories for COVID-19 testing at the cash price that has been posted officially on their website. However, this reimbursement is contingent upon the laboratories properly processing the tests to the laboratory standards proscribed for the field, which includes proper screening of patients prior to administering tests as well as maintaining proper testing environments.
Premera accuses GS Labs of failing to screen patients individually, instead generically stating that the patients complained of possible COVID-19 systems, which permitted over-testing of patients that were not medically indicated. Premera also accuses GS Labs of failing to properly administer and process tests, resulting in contaminated tests and delays in the production of results of up to a week. Finally Premera accuses GS Labs of posting a cash price that is 70% above the rate actually charged for the services as well as multiple times the price of any other laboratory providing these testing services.
The plaintiff is suing for violations of the Washington State Consumer Protection act and violation of ERISA. The plaintiffs are represented by Kilpatrick Townsend & Stockton LLP.