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Blue KC files lawsuit over 'inflated' COVID-19 testing reimbursement costs

Covid testing
Posted at 2:59 PM, Jul 21, 2021
and last updated 2021-07-21 15:59:25-04

KANSAS CITY, Mo. — A Kansas City, Missouri, based insurance company filed a lawsuit Wednesday against a metro-area testing lab alleging record discrepancies and inflating reimbursement costs related to COVID-19 testing.

Blue Cross and Blue Shield of Kansas City requested a judgment in the U.S. District Court for the Western District of Missouri stating that it and its members are not responsible for the “unreasonable, inflated reimbursement demands” from GS Labs, according to a news release.

The lawsuit states that GS Labs is "intentionally 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."

GS Labs, which has locations in Lenexa and Lee’s Summit, requested $380 for rapid-antigen tests, the release stated, when they cost less than $20 wholesale. Other providers charged roughly $35 for the test.

Blue KC has received claims from GS Labs for the following items:

  • Rapid-antigen testing (10,167)
  • Specimen collection (10,277)
  • Rapid-antibody testing (8,253)
  • Various PCR testing (Roughly 800)

Dr. Greg Sweat, Blue KC senior vice president and chief medical officer, said in the release that the insurance group has “worked diligently” to support its members.

“To date, we have completed processing and payment for more than 500,000 COVID-19 diagnostic testing claims and worked with approximately 1,300 providers who have accepted reasonable reimbursement rates for these services,” Sweat said.

The Kansas Insurance Department said in a letter to INFO that if the "astronomical" costs are borne by the health plans and insurers without recompense, consumers will ultimately pay more for their health care as health insurance costs will rise.”