News: BCBS Minnesota sues COVID-19 lab for price inflation
Blue Cross and Blue Shield of Minnesota filed a lawsuit against GS labs, a COVID-19 testing laboratory, to recoup more than $10 million in alleged overpayments stemming from price inflation since the beginning of the pandemic.
The Omaha-based lab allegedly charged more than five times the median market value for its most common COVID-19 test, HealthLeaders reported. BCBS also alleges that GS Labs administered additional tests just to increase the total amount it could charge the payer.
The price transparency requirement under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, says each COVID-19 testing provider is required to disclose specific cash prices on their website in the absence of a contractual payment agreement. According to BCBS, GS Labs intentionally posted inflated prices on their website with the intention of charging the payer larger amounts than what it was willing to accept from individual customers.
"It is our claim that GS Labs intentionally disregarded and misinterpreted federal guidelines for the sole purpose of maximizing profits during a public health emergency," Scott Lynch, senior vice president of pharmacy and chief legal officer at Blue Cross and Blue Shield of Minnesota, stated in a press release.
"After months of attempts at good-faith negotiations, we were unable to reach an agreement with GS Labs that would put in place appropriate COVID-19 testing practices at a fair price. It's egregious price-gouging like this that ultimately drives up the cost of healthcare for everyone," Lynch said.
A lab spokesperson called the lawsuit “strong-arm gamesmanship” by the insurer and indicated that BCBS owes the lab more than $1 million for thousands of tests.
Editor’s note: This article was originally published by HealthLeaders.