Blue Cross and Blue Shield of Kansas City has filed a lawsuit accusing GS Labs, a provider of Covid-19 testing, of duping insurers into paying grossly inflated prices.
GS Labs rejected the claim. The company’s “prices accurately reflect the level of service we provide on a national level and the industry’s safest and most convenient patient experience,” said David Leibowitz, a spokesperson, in an email.
During the Covid-19 crisis, health insurers and plans must cover certain diagnostic tests for the disease per federal laws. But GS Labs is demanding that Missouri-based Blue Cross and Blue Shield of Kansas City “pay rates many times higher than the rates other providers charge for the same services,” the lawsuit, which was filed last week, states.
GS Labs is demanding $380 for rapid antigen tests, while other comparable providers accept approximately $35, the payer claimed in the suit. Further, the test can be purchased for under $20 wholesale. In total, the testing company has submitted over $9.2 million in claims to Blue KC.
“GS Labs knowingly and willfully concealed or misrepresented material facts or circumstances relating to its claims and, in so doing, has forfeited its rights, if any, to reimbursement for the claims made,” the suit states.
The lawsuit will also prevent the company from collecting the outstanding claims directly from its health plan members, which could discourage them from getting tested for Covid-19 in the future, Blue KC said.
“Efficient and effective testing for Covid-19 is a key measure to restoring public health and ending the pandemic,” said Dr. Greg Sweat, senior vice president and CMO of Blue KC, in a news release.
The insurer is asking the court to declare that Blue KC and its members are not required to pay GS Labs.
But, according to GS Labs, all the claims in the lawsuit are false.
“Frankly, we are shocked by Blue KC’s naked attempt to bully our company. Their lawsuit was filed in the midst of an ongoing negotiation over prices, one GS Labs participated in good faith,” said GS Labs spokesperson Leibowitz.
The company claims that Blue KC has thus far paid approximately $3.40 per patient visit.
“We look forward to resolving this in court, and to receiving payment from BCBS Kansas City for the services we provided, as required by federal law,” Leibowitz said.
The lawsuit comes on the heels of a report from America’s Health Insurance Plans, which claims that certain Covid-19 testing providers are engaging in price gouging.
Out-of-network providers were charging high prices — more than $185 — for 54% of Covid-19 tests in March, according to the report. This is a significant jump from the average cost of $135 for a test in the commercial market.
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