Premera Blue Cross v. GS Labs LLC

Why this Matters
The plaintiff, a health insurance company, argues that a clinical lab’s improper inflation of COVID-19 testing reimbursement amounts entitles the plaintiff to recover unlawful overpayments under the Employee Retirement Income Security Act. Major COVID-19 relief legislation specifies that health insurers must provide coverage for COVID-19 testing without requiring any cost sharing on the part of patients, and requires insurers to reimburse testing providers (both in- and out-of-network) for conducting such testing. However, the law’s requirement that health insurers pay an out-of-network provider of COVID-19 testing a “cash price” listed on their public website— rather than a market-determined price or amount keyed to Medicare payment rates — has the potential to inflate costs for out-of-network COVID-19 testing.

Potential Impact
The lack of guardrails related to capping payment rates for out-of-network COVID-19 testing services can drive up the costs of such testing.