Blue Cross and Blue Shield of Minnesota has settled its lawsuit against an Omaha-based lab company that the health insurer alleged was charging unreasonably high prices for COVID-19 tests.
Blue Cross of Minnesota settles lawsuit over lab's alleged 'profiteering' with COVID-19 tests
The Eagan-based health insurer said it was not disclosing financial terms from its settlement with GS Labs.
August 8, 2023 at 4:24PM
The settlement with GS Labs, which operated several testing facilities in the Twin Cities, was announced Friday by the U.S. District Court of Minnesota.
Settlement terms were not made public.
Eagan-based Blue Cross said in a statement that it was "pleased to have ended the GS Labs litigation on favorable terms." The lab company said it was "pleased to have successfully settled" the payment dispute.
Drive-in testing centers by GS Labs were part of the unusual health care landscape that developed at the height of the pandemic, as patient demand for COVID-19 diagnostics pushed clinics, health systems and states to dramatically expand capacity while administering tests in new locations.
"This settlement achieves our ends of keeping costs affordable and maximizing the value of every health care dollar spent on behalf of our members," Blue Cross said in a statement.
GS Labs said it has now reached settlements with almost all major health insurers. Its success in doing so "re-affirms the value of the lifesaving services that GS Labs provided to its 1.4 million patients throughout the COVID-19 pandemic," the company said.
A note Tuesday on the GS Labs website said its community testing sites in Minnesota and other states are all closed now.
In its March 2022 lawsuit, Blue Cross alleged that GS Labs was "profiteering off the pandemic and at Blue Cross's expense" by pocketing "millions of dollars in wasteful and duplicative testing fees."
A spokesman for the lab shot back that Blue Cross' actions provided yet another example of "strong-arm gamesmanship by 'big insurance,' designed to hide their egregious failure to obey [federal law]" on paying for COVID-19 tests.
Last year, a federal judge dismissed a lawsuit from GS Labs that alleged Minnetonka-based Medica failed to provide full payment for thousands of COVID-19 tests. GS Labs appealed and the parties in July announced a settlement in principle, according to a court filing
In 2021, the lab company was sued twice by other health insurers that alleged the company was charging unreasonably high prices.
"GS Labs has now settled three out of the four COVID-19 related payment disputes that it once was forced to fight in court," the company said.
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