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Federal Court Tosses Consumer Fraud Lawsuit Against Labcorp

by | Feb 22, 2023 | News, Open Content

Not disclosing list prices of uncovered lab tests on ABN is not consumer fraud, court says.

A consumer fraud lawsuit that could have shaken the lab industry had it been decided the other way began when a Labcorp patient received a $292 bill for a Vitamin D test listed on the Advance Beneficiary Notice (ABN) form as costing $18.93. The explanation for the discrepancy, of course, is that the ABN price didn’t apply because the patient’s insurer, Highmark Blue Shield, didn’t cover the test. However, the patient was “shocked” and teamed up with another patient in a similar situation to bring a class action lawsuit against Labcorp for allegedly violating Nevada state consumer fraud law.

The North Carolina federal court ruled that the patients didn’t have a valid legal claim and dismissed the lawsuit. Explanation: As do many states, Nevada has a consumer fraud law that allow consumers to sue companies for making “false or misleading” statements that they know customers will rely on to their detriment. The patients claimed that the ABN was false and misleading because it didn’t include the list price that patients would have to pay for lab tests not covered by their insurance.

Labcorp did omit this information from the ABN, the court acknowledged, but so does everyone in the lab industry. The point of the ABN, the court explained, is to disclose to patients what they’ll have to pay out of pocket if the test is covered by insurance. And that’s exactly what the Labcorp ABN did. Moreover, it specifically stated that:

  • The listed prices are estimates based on the assumption that “those services are covered by [the patient’s] health insurance plan”
  • The estimates reflect “health plan information provided at the time of service”
  • The amount the patient may have to pay may be different from the estimated amount
  • The patient was “fully responsible” for paying any such differential amounts    

[Nolan v. Lab’y Corp. of Am. Holdings, 2023 U.S. Dist. LEXIS 23526]