Blue Cross and Blue Shield Sues Lab for COVID-19 Test Price Gouging

Case: Blue Cross and Blue Shield of Kansas City is suing GS Labs for COVID-19 test price gouging, contending that the national testing facility inflated its cash prices and performed medically unnecessary tests on out-of-network members. The $9.2 million federal lawsuit accuses GS Labs of “engaging in an abusive scheme to exploit the COVID-19 pandemic by duping health insurers into paying thousands of COVID-19 diagnostic testing claims at grossly inflated rates.” BCBS claims that GS Labs charged it $380 for a COVID-19 antigen test, roughly 10 times what Medicare reimburses for the test and up to $979 for a PCR test.

Significance: Insurers and labs have been waging PR war against each other almost from the moment the federal government mandated that payors cover COVID-19 tests without charging copays, deductibles or other out-of-pocket expenses. Labs have claimed that payors aren’t obeying the mandate; insurers have accused labs of price gouging. But this is the first time the conflict has festered into actual litigation. However, this is not the first time that GS Labs’ test prices have come under question. Last December, the Kansas Insurance Department began investigating a local facility owned by GS Labs for charging $1,000 for tests. GS Labs has yet to comment on these allegations.