Lawsuit: Kaiser charged patients for free COVID tests [Bay Area News Group]

San Jose Mercury News (CA)

Testing for COVID-19 is supposed to be provided free under federal legislation aimed at slowing the virus’ spread, but a class-action lawsuit this month accuses Oakland-based Kaiser Permanente, California’s largest health insurer, of billing patients more than $300 for the procedure.

The lawsuit was filed Aug. 8 in Alameda County Superior Court on behalf of a Sacramento woman, Faye Getubig, a Kaiser Foundation Health Plan member who went to the HMO in June for a test after feeling COVID-19 symptoms. She got the nasal swab, and after she received her results, she got a bill.

For $310.

“Federal law says any test for COVID has to be free,” said Brian Devine, one of the lawyers at Seeger Devine in San Rafael who filed the suit on behalf of Getubig and others similarly billed by the health care giant for COVID-19 tests. “Insurers are still required to cover all the costs.”

Kaiser said in a statement that “we are reviewing our member’s allegations and if she has identified an error regarding her bill we will certainly correct it.”

“Over the last two-and-a-half years of the pandemic we have supported our members and patients in obtaining a total of more than 20 million COVID-19 tests,” Kaiser’s statement said.

The California Department of Managed Health Care which oversees insurers said in a statement that health plans the state regulates must cover COVID-19 tests without any cost-sharing including co-pays, co-insurance, deductibles or other out-of-pocket costs.

“If a health plan enrollee receives a bill related to the coverage or administration of a COVID-19 test, they should first file a grievance with their health plan and include a copy of the bill,” the department said in the statement. Their health plan should review the grievance and should ensure the enrollee is reimbursed.

If the enrollee disputes the plan’s response or if the plan takes more than 30 days to fix the problem, they should file a complaint with the DMHC Help Center at www.HealthHelp.ca.gov or 1-888-466-2219, the statement said.

The lawsuit accuses Kaiser of using a bundling strategy to make its members shoulder part of the cost of their test. Kaiser processed Getubig’s sample using a “multiplex” diagnostic that detects both SARS-CoV-2, the virus that causes COVID-19, and influenza A and B viruses at the same time.

Getubig’s bill showed Kaiser covered the full $181 cost of her COVID test results. But it showed a $536 cost for a flu virus detection test, for which her plan only paid $226. The remaining $310, it said, was her responsibility. The lawsuit said she disputed the charge but Kaiser was unmoved.

The lawsuit said Getubig did not request or want any test other than one to detect the COVID virus. It said that because the multiplex test processing includes COVID-19 results, it is against federal law to bill for it, even if it also includes results for other viruses.

“These people never asked for a flu test,” Devine said. “They’re bundling it together, but it’s still just one test. They shouldn’t be passing on this $310 charge to people who are just trying to get a COVID test.”

The law firm has heard from several other plan members who received identical bills, and said that with Kaiser insuring 40% of Californians, the number of patients who may have been improperly billed could be huge. That will become clearer after lawyers obtain records from Kaiser, Devine said.

“We don’t know how long Kaiser has been doing this or how many people it’s affected,” Devine said. “We’ve heard from probably a handful of people in the last few weeks. That gives us some sense that this is a widespread practice.”

The suit asks the court to prohibit Kaiser from billing its members for COVID tests, notify them they have a right to have COVID tests, including multiplex diagnostics, at no charge, reimbursement of billed members, punitive damages and attorney fees.

Testing was seen as a key part of the global effort to control the spread of COVID-19 by identifying who was infected as soon as possible to limit how many others they expose.

The U.S. testing response drew widespread criticism in early 2020 over missteps that led to delays and shortages of the test kits. But legislation adopted in March 2020, the Families First Coronavirus Response Act and Coronavirus Aid, Relief, and Economic Security — or CARES — Act, specified that diagnosis for the virus had to be provided at no cost, which was seen as key to removing barriers for people to seek testing.

Devine said those provisions will remain in effect at least as long as the U.S. state of emergency regarding the COVID-19 pandemic. He said he’s unaware of similar cases of insurers illegally billing for COVID tests.

“By imposing an illegal price barrier to receiving a COVID test, Kaiser is actively discouraging its members from being tested,” the lawsuit said. “And by driving down the number of people receiving COVID tests, fewer people will find out they are positive for COVID, and will transmit the virus on to others.”