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COVID-19 Testing Supplier Sues Plans and TPAs for Violating Group Well being Plan Protection Mandate


Diagnostic Associates of N.E. Hou, LLC v. United Healthcare Servs., 2022 WL 214101 (S.D. Tex. 2022)

A COVID-19 testing laboratory alleged that quite a few well being plans and TPAs violated the Households First Coronavirus Response Act (FFCRA) and the Coronavirus Help, Aid, and Financial Safety Act (CARES Act) by failing to cowl the laboratory’s diagnostic exams at a publicly disclosed value of $900 per take a look at. As background, the legal guidelines and associated company steerage require group well being plans and insurers to cowl COVID-19 diagnostic testing with out cost-sharing, prior authorization, or different medical administration necessities (see our Checkpoint article). Within the absence of a negotiated price, plans should pay for the testing on the money price posted by the supplier on its public web site.

The courtroom allowed the lawsuit to proceed, discovering that the FFCRA and CARES Act embrace an “implied non-public proper of motion” that permits the supplier to sue for the required reimbursement. The courtroom additional decided that the supplier might search fee of advantages below ERISA on behalf of plan contributors as a result of it had obtained assignments of advantages from most of the contributors who had obtained testing. Lastly, the courtroom allowed the supplier’s claims below the Racketeer Influenced and Corrupt Organizations Act (RICO) alleging that the plans and TPAs had engaged in a “calculated and coordinated effort to delay, deny, or cut back the restoration [the provider] might make for its COVID-19 testing providers and to revenue by doing so.”

EBIA Remark: Well being plans face a conundrum below the COVID-19 diagnostic testing protection mandate. If plans are unable to succeed in settlement with a testing supplier, they’re obligated to pay the supplier’s public money value. It’s unsure, nonetheless, what recourse is obtainable when the worth (right here, $900 per take a look at) appears unreasonable. In a footnote to its opinion, the courtroom acknowledged the plan’s assertion that the worth of the testing was too excessive and famous that its ruling didn’t foreclose a counterclaim difficult the propriety of the pricing. For extra data, see EBIA’s Group Well being Plan Mandates guide at Part XVI.C (“COVID-19: Mandated Protection of Diagnostic and Preventive Providers”). See additionally EBIA’s Self-Insured Well being Plans guide at Part XIII.C.11 (“Protection Mandates Regarding the COVID-19 Pandemic”) and EBIA’s Client-Pushed Well being Care guide at Part X.H (“COVID-19 Testing and Remedy”).

Contributing Editors: EBIA Workers.

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