GS Labs Countersues, Fires Back At Blue KC Over $9.7 Million Payment Failure

KANSAS CITY, Mo., Aug. 5, 2021 /PRNewswire/ -- GS Labs, a leading provider of COVID-19 rapid tests in 13 states and 27 locations nationwide, today filed multiple counterclaims against multi-billion-dollar insurance giant Blue Cross Blue Shield of Kansas City. The filing accuses Blue KC of legal bullying and "reckless disregard for the law" in a baseless attempt to stiff GS Labs on payments legally owed after the laboratory provided COVID rapid tests for more than 12,000 Blue KC members.

"As COVID-19 infections and the Delta variant spread like wildfire in Blue KC's backyard, you'd think this insurance company would make people their priority, not profits," said Kirk Thompson, a partner with GS Labs. "Instead, Blue KC grossly violated the plain language of the CARES Act and violated federal law. We cannot let them get away with this scheme and we can't let this company prevent residents from getting COVID tests they absolutely need."

As incentivized by Congressional legislation, GS Labs' entrepreneur-owners stepped up last year amid a national health crisis to develop best-in-industry COVID-19 testing technology and customer service. The owners invested $37 million to build and staff a national testing business, including establishing testing operations in 27 locations, hiring nearly 3,000 essential workers, and developing infrastructure to handle internal billing, communications and the labs' 24-hour hotline, staffed around the clock by registered nurses.

GS Labs' state-of-the-art custom technology platform – another critical infrastructure investment – serves as many as 1,000 patients per day, seven days a week at each of 27 testing sites nationwide. This unique platform allows patients to book within 15 minutes of their proposed appointment and to receive accurate rapid results in as little as 20 minutes.

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 had been in the midst of ongoing price negotiations with Blue KC. Rather than participate in good faith, the insurance giant instead used the more than 20,000 pages of documents provided by GS Labs to file a surprise lawsuit and launch a media ambush.

"The law was meant to be simple: Insurance companies like Blue KC are responsible to pay for COVID tests," Thompson added. "This is a perfect example of Big Insurance trying to make things absurdly complicated to avoid paying what they owe. Blue KC had the opportunity to discuss their concerns with us directly, but instead resorted to ambushing us with false claims and a reckless lawsuit."

Other Blue Cross Blue Shield companies have paid GS Lab's cash price without negotiation or filing a baseless lawsuit.

Blue KC has paid GS Labs' cash price on a fraction of the submitted claims, while paying arbitrary amounts or stiffing GS Labs on the rest. Thus far, Blue KC has paid $108,945 – about 1 percent of the total $9.7 million owed. A total of 34,621 claims remain unpaid. The facts:

• Insurers nationwide have agreed to pay the GS Labs cash price for various COVID-19 tests and to pay GS Labs as an out-of-network provider.
• Congress, as well as the Trump and Biden Administrations, have clarified that group health plans and health insurance issuers like Blue KC must cover and reimburse COVID–19 testing and related services, as codified by the Families First Coronavirus Response Act and the CARES Act.
• A recent survey by Kaiser Family Foundation found that about 20 percent of COVID-19 diagnostic tests have a cash price of more than $300.

GS Labs is seeking the full payment of $9.7 million, plus compensatory damages, interest and legal fees. Importantly, the counterclaims seek to defend Blue KC's members from the insurance company itself. This is necessary because Blue KC has attempted to illegally shift its costs to the public by informing some members on their Explanation of Benefits that they are responsible for a portion of the testing fee. The CARES Act expressly forbids such billing.

GS Labs began offering COVID-19 rapid tests in October. 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 has safely and effectively tested nearly a half-million Americans, including more than 12,000 Blue KC customers. GS Labs offered reduced price testing for financially challenged consumers who could not afford the cash price, but needed safe, accurate rapid results.

"We saw a need for testing and we immediately made a commitment to do our part because that's what American businesses do in a crisis," said Thompson. "The $37 million we spent rushing to aid communities in crisis was money well-spent, as evidenced by the thousands of individuals and families who flocked to our facilities, especially during the holidays. We're not looking for a pat on the back, but we want Blue KC to keep its legal and moral obligation, while letting our patients know we remain here for them as we work to open new sites in the wake of the sweeping Delta variant"

Despite Blue KC's actions, GS Labs plans to reopen soon in the Kansas City area in response to the Delta variant. Mayor Quinton Lucas recently reinstated the city's indoor mask mandate.

"We are proud to have supported communities and consumers and we absolutely will continue to do so," said Thompson, the partner. "We will vigorously defend our business practices and our company's reputation. And we look forward to Blue KC's obeying federal law and paying for the 12,000 tests we provided its members in their moment of need."

Contact:
David Leibowitz,
602.317.1414,
[email protected]

SOURCE GS Labs