GS Labs Countersues Blue Cross Blue Shield of Minnesota: Federal Court Filing Accuses Insurer of Antitrust Violations, Conspiring With Cartel of BCBS Affiliates, Violating CARES ACT, False Advertising and Consumer Fraud

BCBS of MN's Anti-Competitive Actions Risk Minnesotans' Lives During Pandemic By Creating Illegal Barriers To COVID-19 Testing

MINNEAPOLIS, June 29, 2022 /PRNewswire/ -- GS Labs, a leading provider of COVID-19 rapid tests in Minnesota and across the nation has filed new counterclaims in the company's ongoing legal battle against multi-billion-dollar insurance giant Blue Cross Blue Shield of Minnesota.

The June 29th filing in U.S. District Court for the District of Minnesota flatly denies all prior allegations made by BCBS of Minnesota against GS Labs. GS Labs has also alleged 21 counterclaims against BCBS of Minnesota detailing a scheme to harm competition in violation of the federal antitrust laws, resulting in COVID testing shortages in Minnesota, by conspiring with other Blue insurance companies in a cartel to fix prices and illegally boycott quality testing labs.  The countercomplaint also sets forth factual allegations showing that BCBS of Minnesota committed consumer fraud by misleading Minnesotans in need of COVID testing, tortiously interfered with GS Labs' business relationships, and violated the CARES Act by refusing to reimburse GS Labs for thousands of COVID tests for its insureds.

In October 2020, BCBS of Minnesota and its affiliate Blues agreed to pay $2.67 billion to settle a class action alleging collusion among the Blue affiliates in violation of federal antitrust laws. That settlement agreement included operational changes meant to enhance competition among Blue insurers. However, BCBS of Minnesota's conduct raises new concerns that it and its sisters Blues continue to engage in anticompetitive behavior.

"Throughout the pandemic, GS Labs has been there to provide fast and accurate testing for more than 300,000 Minnesotans," said Jen Rae Wang, a representative for the company. "While insurance companies across the U.S. have paid GS Labs for these services, BCBS of Minnesota has colluded with other Blues to suppress testing, boycott GS Labs, and price-fix across the state and the nation. That anti-competitive act of greed has made it harder for residents to get critical medical information and has dangerously impacted public health."

The filling alleges that BCBS of Minnesota, "joined forces with other BCBS affiliates to exchange competitively sensitive information and fix the purchase price of COVID-19 diagnostic testing services at unsustainable cut-rates, and to boycott providers like GS Labs that do not accede to the BCBS cartel's fiat prices." The countersuit additionally details how the Blues worked together through the BCBS Association and their joint participation in the American Health Insurance Plans ("AHIP"), a national trade association for health insurance companies which counts among its Board of Directors eight members who are senior executives of BCBS affiliates.

The filing describes BCBS's, "concerted and willful actions to exclude and suppress output and reduce the quality of testing capacity by fixing prices, engaging in a boycott to withhold reimbursement, and spreading disinformation to steer subscribers away from GS Labs takes Minnesota in the opposite direction, harming competition, consumers, and GS Labs in the process. In other words, the reason for the long lines and broken testing regime is Blue Cross."

"The countersuit demonstrates Blue Cross and Blue Shield's greed and deception amidst a massive public health emergency," said Wang. "BCBS of Minnesota has violated the law, deceived Minnesota residents, and banded together with other Blues to spike profits and suppress testing capacity at the expense of their members and the public's health. These disgraceful, unethical and illegal actions should never be tolerated."

David Leibowitz, a GS Labs spokesperson, also highlighted an irony regarding BCBS' original lawsuit against GS Labs: On the very day that BCBS of Minnesota sued GS Labs for fraud and abuse, it also extended an invitation to GS Labs to become an in-network participating provider.

"Only a mega-billion-dollar insurance company would sue for fraud a legitimate testing business that's helped over one million people with life-saving medical information, then in the same breath ask that provider to become an in-network partner," said Leibowitz. "Apparently, BCBS of Minnesota would have been all too happy to work with GS Labs, but only at cut-rate price that would have bankrupted the provider while the insurance company got fatter and happier."

The CARES Act makes clear that insurance carriers must pay for COVID-19 testing for insured members. Section 3202(a) states: "If the health plan or issuer does not have a negotiated rate with such provider, such plan or issuer shall reimburse the provider in an amount that equals the cash price for such service as listed by the provider on a public internet website, or such plan or issuer may negotiate a rate with such provider for less than such cash price."

GS Labs is seeking full payment for unpaid bills that currently total tens of millions of dollars, plus legal fees, investigative fees and compensation for lost goodwill. The company also seeks three times the actual damages for each of Blue Cross' antitrust violations, together with costs and disbursements, including reasonable attorneys' fees, compensatory damages, interest and legal fees.

"The BCBS buyers' cartel for COVID-19 diagnostic testing has obtained its intended and predictable effect: namely, depressed reimbursements rates for COVID-19 diagnostic services provided by GS Labs have boosted Blue Cross' profits," the counterclaim explains. "The victims of this scam, however, are the suppliers of the testing who stood ready to provide additional output in order to alleviate national shortage, as well the pubic and patients who suffered severe documented testing shortages."

GS Labs began offering COVID-19 rapid tests in October 2020. Many communities directly requested assistance from GS Labs, due to a lack of testing resources. By keeping testing centers open 12 hours a day during the height of the pandemic – and paying above-market salaries to hire experienced registered nurses and other medical professionals – GS Labs to date has safely and effectively tested more than 1.3 million Americans.

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SOURCE GS Labs