Skip to main content
Premium Trial:

Request an Annual Quote

GS Labs Sues Insurer Medica for COVID-19 Rapid Test Reimbursement

NEW YORK ─ GS Labs has sued Minnetonka, Minnesota-based insurer Medica alleging it failed to fully reimburse more than 30,000 insurance claims, worth almost $10 million, for COVID-19 rapid testing.

In a document filed in the US District Court for the District of Minnesota last week, GS Labs said that Medica has "acted with deliberate disregard for the rights and safety of others" during the pandemic and has shown "deliberate disregard — in addition to contempt — for the rights and safety" of its insured members in need of COVID-19 diagnostic testing provided by GS Labs.

GS Labs, formed in January 2020 as a clinical lab in Omaha, Nebraska, is seeking a judgment in its favor "in an amount that greatly exceeds $75,000, totaling several million dollars, and which increases each day."

The laboratory firm conducts rapid antigen, rapid antibody, and PCR tests for SARS-CoV-2.

In a statement, the lab alleged Medica has violated the federal Coronavirus Aid, Relief, and Economic Security Act, ignoring a directive that health insurance companies reimburse providers for diagnostic testing. It added that to date, Medica has fully paid it for about 8 percent of its current claims.

Medica said in an email that it does not comment on pending litigation.

According to GS Labs, other US insurers have agreed to pay GS Labs' $380 posted cash price or a lower negotiated rate for various COVID-19 tests.

"Rather than obey federal law and pay us or negotiate a lower rate, some insurers have falsely accused us of price gouging," Kirk Thompson, a partner with GS Labs, said in a statement. "Those accusations are meant to manipulate the public's perception of the cost to provide this critical service, and it ignores the fact that over half of out-of-network labs charge similar rates."

In its complaint, the laboratory firm said that it conduced more than 22 percent of the rapid antigen COVID-19 tests completed in Minnesota in September, and has provided coronavirus testing to more than 90,000 Minnesotans since early in the pandemic. Of these, more than 16,000 patients are insured by Medica, and more than 20 percent have requested and received COVID-19 diagnostic testing from GS Labs on more than one occasion, the firm added.