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Scientists and Medical Professionals Face Huge Fees, Court Costs after Speaking at Certain COVID-19 Webinars

Little-known Polish company relied on suspect arbitration court to demand thousands of euros from conference speakers

Clinical laboratory and pathology professionals may want to heed the phrase “caveat emptor” (“let the buyer beware”) if invited to speak at events organized by little-known entities. That appears to be the lesson from a rather bizarre story coming out of Poland involving scholars from multiple countries who agreed to speak during a series of online COVID-19 webinars and who were later billed thousands of euros for their participation.

In “Costly Invite? Scientists Hit with Massive Bills after Speaking at COVID-19 ‘Webinars,’Science magazine reported that in 2020 and 2021, dozens of researchers were invited by a Polish company called Villa Europa to speak in a series of online conferences about modeling of COVID-19.

But months after the event, the organizer demanded payment for the researchers’ participation, and in some cases, turned to a Polish arbitration court to enforce the demand. But in a curious twist, the legitimacy of that court has itself been called into question.

“I was interested in the topic, and I agreed to participate,” Björn Johansson, MD, told Science. “I thought it was going to be an ordinary academic seminar. It was an easy decision for me.” Johansson, a physician and researcher at the Karolinska Institute in Sweden, has since “come to regret that decision,” the publication reported.

Villa Europa is now seeking €80,000 ($86,912 in current US dollars) from Johansson, including legal costs and interest, after turning to a Swedish court. Others have received demands for €13,000 to €25,000 ($14,123 to $27,156) in fees, late payment penalties, and court costs, Science reported.

Researchers Axel Brandenburg, PhD (left), and Björn Johansson, MD (right), are two of the 32 scholars from six countries who are now being billed thousands of euros for their participation in the Villa Europa COVID-19 modeling webinars. Pathology and clinical laboratory leaders who receive similar invitations may want to thoroughly read the contracts before agreeing to participate. (Photo copyright: Axel Brandenburg, Björn Johansson.)

How Did It All Happen?

According to Science, the ordeal began when an individual named Matteo Ferensby invited the scientists to speak at the webinars. His email signature indicated an affiliation with the University of Warsaw, but the university “has no employee by that name, according to the institution’s press office,” Science reported, adding that “there is no track record of scientific publications from a Matteo Ferensby.”

By one speaker’s count, the company produced at least 11 webinars between April 2020 and June 2021. “The speakers themselves—about 10 people in each session—were the only audience, but participants were told the recordings would be published open access afterward,” Science reported.

Ferensby did not disclose that speakers would be charged conference fees. In fact, one speaker was told explicitly that no fees would be requested, Science noted.

However, the speakers were later asked to sign a license agreement that would allow the organizer to publish the recordings. It included a clause on the last page stating that they would have to pay fees of €790 and €2785 (US$859 and $3,029) related to publication.

The financial amounts were written in words rather than numbers with no highlighting, according to Science, which reviewed some of the contracts.

“Many of the speakers, already busy studying COVID-19 and under pressure from the transition to remote teaching, did not notice these clauses,” Science reported. Said one speaker: “The contract was unreadable [but] I eventually sent it.”

Questionable Arbitration

Some of the webinar participants told Science that they later received altered versions of the contracts with “an additional page where the fees are made explicit, and [with] modified clauses, one of them stating that disputes can be settled by a Polish arbitration court.”

That court, identified as Pan-Europejski-Sąd-Arbitrażowy (Pan European Arbitration Court or PESA), apparently does not exist. Agnieszka Durlik, JD, Director General of The Arbitration Court at the Polish Chamber of Commerce, told Science that she had never heard of PESA, and it that appears Villa Europa set up the PESA website.

“In my opinion this is fraud,” Durlik said. Nevertheless, Villa Europa used alleged rulings by PESA to go after some of the speakers in their own local courts.

“For the researchers now under pressure from the courts, ignoring the demands is not an option,” Science reported. “They have all submitted court filings supporting their case.”

The speakers claim that “the demands are illegitimate and that they were deceived about what they were signing in the contracts,” Science noted. One speaker, Axel Brandenburg, PhD, of the Nordic Institute for Theoretical Physics (NORDITA), is awaiting a ruling in September, Science reported.

Warnings against Predatory Conferences

The story comes amid increasing concerns about so-called “predatory conferences,” in which scientists are invited under false pretenses to participate in what appear to be legitimate meetings.

“Would-be attendees should expect missing plenary speakers, multiple fields of research smashed together in a Frankenstein program, and an absence of the important academic rigor that fuels the conferences that scientists know and love,” wrote senior science writer Ruairi J. Mackenzie in Technology Networks. “The companies organizing these events are motivated by profit above all else.”

Mackenzie offered several tips to help both speakers and attendees spot fake conferences:

  • Examine the promotional materials. “Whether you are studying an unprompted email or a conference webpage, look for shoddy writing quality or outlandish layouts.”
  • Check with your colleagues. “The dominant conferences in your field are probably in that position because they have proved time and time again that they can deliver a valuable experience for attendees.”
  • Look at other conferences from the same producer. If a company produces a high volume of conferences on a wide range of topics, that can be a sign that the quality will be shoddy, he suggested.
  • Look at the contact information. A legitimate conference should have ties to an established society or conference organizer. Get the address, and then look at that location in Google Street View to see if it’s the kind of building where you’d expect a legitimate company to be located.

The experience of these 32 scientific and medical scholars demonstrates that there is always a new twist in how honest citizens can be defrauded. For that reason, clinical laboratory managers and pathologists should be wary when approached by unknown organizations with speaking invitations, particularly in Europe.

—Stephen Beale

Related Information:

Costly Invite? Scientists Hit with Massive Bills after Speaking at COVID-19 ‘Webinars.’

The Ultimate Guide to Avoiding Predatory Conferences

The Alarming Rise of Predatory Conferences

The Ethics Blog: Predatory Conferences

Arbitrarily Applied: Another COVID-19 Scam, This Time On Scientists

Clinical Laboratory Owner Receives 15-Year Federal Prison Sentence, Hefty Fine as DOJ Hits Hard on Healthcare Fraud Cases

US Department of Justice sends a strong message that it will continue to root out fraud involving clinical laboratory owners and operators

Arkansas clinical laboratory owner/operator Billy Joe Taylor has been sentenced to 15 years in federal prison and ordered to pay nearly $30 million in restitution, according to a June 8 press release from the US Attorney’s Office for the Western District of Arkansas.

Taylor pleaded guilty in October of 2022 to conspiracy to commit fraud and money laundering. He and his accomplices submitted $134 million in false or fraudulent claims to Medicare before and during the COVID-19 pandemic.

The claims came from five laboratory companies owned and operated by Taylor and his co-conspirators. All claims centered around respiratory illness tests or urine drug tests that were either not medically necessary or not ordered by medical providers, the DOJ’s press release states.

Taylor’s 15-year sentence in federal prison and huge restitution reinforces the fact that the federal Department of Justice (DOJ) will indict—and convict—owners and managers of clinical laboratory companies accused of healthcare fraud.

Billy Joe Taylor, owner/operator of five clinical laboratories in four states, was sentenced in June to 15 years in prison and ordered to repay nearly $30 million in fraudulent test claims made to Medicare prior to and during the COVID-19 pandemic. This conviction is part of an ongoing campaign against healthcare fraud being conducted by the US Department of Justice. (Photo copyright: Arkansas Democrat-Gazette.)

Details of Taylor Fraud Case

Taylor allegedly obtained private personal and medical data from Medicare beneficiaries and then used that information to submit and resubmit claims to Medicare for diagnostic tests. More than $38 million was received from Medicare on those fraudulent claims, the DOJ noted.

According to an October 2022 DOJ press release, the labs involved in the case included:

In 2021, Taylor claimed innocence and told Arkansas Business that the accusations were “sensationalism-type claims from the government that were completely erroneous and false.”

As a young man, Taylor planned to go into the clinical laboratory field when he was still in high school. He got started by volunteering at his hometown hospital in Stigler, Oklahoma, the Free Library reported. Eventually hired by the hospital to draw blood, run tests, and keep quality control and inspection data, Taylor later moved to other hospitals before partnering in 2009 to start Advanced Laboratory Services (ALS) of Oklahoma City, Oklahoma.

A pulmonary embolism and stroke forced Taylor to sell his share in ALS, and not long after returning as a consultant, his business partner sold the lab company. Taylor joined two people from a Tulsa laboratory to start a new company, acquiring Medtest Laboratories LLC of Hurricane, West Virginia, and Vitas laboratory LLC in 2017. He hoped to compete with national laboratories, earning up to $2 million per month, the Free Library reported.  

Other Clinical Laboratory Testing Fraud Schemes

The DOJ’s aggressive efforts to crack down on healthcare fraud over the past years have produced multiple court cases against clinical laboratory owners, managers, and the doctors who conspire with them. Dark Daily has covered such fraud cases in numerous ebriefings over the years.

In “Southern California Physician and Clinical Laboratory Owners Charged in Federal Crackdown on Pandemic-Related Billing Fraud,” we reported on federal charges that had been brought against a number of physicians and clinical laboratory owners in what the DOJ described as the “largest ever” coordinated nationwide law enforcement effort against COVID-19 pandemic-related healthcare fraud.

Also, in “California Clinical Laboratory Owners among 21 Defendants Indicted or Criminally Charged for COVID-19 Test Fraud and Other Schemes Totaling $214 Million,” we covered how the DOJ had charged the owners of a California clinical laboratory—as well as 19 other defendants—for their roles in fraudulent billing, kickbacks, and money laundering schemes to defraud Medicare of more than $214 million.

And in “Department of Justice Recovers $1.8B from Medical Laboratory Owners and Others Accused of Alleged Healthcare Fraud During COVID-19 Pandemic,” we reported that DOJ had recovered billions of dollars as a result of federal investigations into alleged healthcare fraud by clinical laboratories and other organizations during fiscal year 2020.

DOJ’s Healthcare Fraud Unit

In 2021, the DOJ’s Healthcare Fraud Unit brought “criminal charges against 14 defendants, including 11 newly-charged defendants and three who were charged in superseding indictments, in seven federal districts across the United States for their alleged participation in various healthcare fraud schemes that exploited the COVID-19 pandemic and resulted in over $143 million in false billings,” a DOJ press release announced.

In a statement to the press, Deputy Attorney General Lisa O. Monaco said, “The multiple healthcare fraud schemes charged today describe theft from American taxpayers through the exploitation of the national emergency … These medical professionals, corporate executives, and others allegedly took advantage of the COVID-19 pandemic to line their own pockets instead of providing needed healthcare services during this unprecedented time in our country.

“We are committed to protecting the American people and the critical healthcare benefits programs created to assist them during this national emergency, and we are determined to hold those who exploit such programs accountable to the fullest extent of the law,” she added.

Monaco’s statement emphasizes the DOJ’s expanding focus on healthcare fraud. The DOJ formed the Health Care Fraud Strike Force in 2007 to handle cases like Taylor’s. The program is composed of 15 teams operating out of 25 federal districts. During the 15 plus years the Strike Force has been active, the DOJ has charged more than 5,000 defendants who collectively billed over $24 billion to both private insurers and federal healthcare programs.

Therefore, it behooves clinical laboratory managers to ensure all lab operations are well-within the bounds of legality. The DOJ is taking its hunt for healthcare fraudsters quite seriously.

—Kristin Althea O’Connor

Related Information:

Lavaca Man Sentenced in $134 Million COVID-19 Health Care Fraud and Money Laundering Scheme

Lavaca Man Sentenced to 15 Years in Prison, Ordered to Pay More than $29.8 Million in Medicare Fraud Case

Lavaca Man Gets July 19 Sentencing Date in Federal Healthcare Fraud, Money Laundering Case

Lab Owner Fights His Insurer, and Now a Federal Fraud Case: Lavaca Man Denies Fraud in Health System, Accusing US of ‘Sensationalism’

Lavaca Man Pleads Guilty of Conspiracy to Commit Healthcare Fraud and Money Laundering

Lavaca Man Pleads Guilty to Stealing Millions in Medicare Fraud

DOJ Announces Coordinated Law Enforcement Action to Combat Healthcare Fraud Related to COVID-19

Federal Trial for Lavaca Man Facing Healthcare Fraud Charges Moved to Next Year

Southern California Physician and Clinical Laboratory Owners Charged in Federal Crackdown on Pandemic-Related Billing Fraud

California Clinical Laboratory Owners among 21 Defendants Indicted or Criminally Charged for COVID-19 Test Fraud and Other Schemes Totaling $214 Million

Department of Justice Recovers $1.8B from Medical Laboratory Owners and Others Accused of Alleged Healthcare Fraud During COVID-19 Pandemic

Southern California Physician and Clinical Laboratory Owners Charged in Federal Crackdown on Pandemic-Related Billing Fraud

Federal prosecutors build the new healthcare-related fraud cases on previous nationwide enforcement actions from 2022

Federal charges have once again been brought against a number of physicians and clinical laboratory owners in what the US Department of Justice described as the “largest ever” coordinated nationwide law enforcement effort against COVID-19 pandemic-related healthcare fraud.

In total, the DOJ filed criminal charges against 18 defendants in five states plus the territory of Puerto Rico, according to an April 20 press release.

The highest dollar amount of these frauds involved ENT physician Anthony Hao Dinh, DO, who allegedly defrauded the Health Resources and Services Administration (HRSA) COVID-19 Uninsured Program for millions of dollars, and Lourdes Navarro, owner of Matias Clinical Laboratory, for allegedly “submitting over $358 million in false and fraudulent claims to Medicare, HRSA, and a private insurance company for laboratory testing” while performing “COVID-19 screening testing for nursing homes and other facilities with vulnerable elderly populations, as well as primary and secondary schools,” the press release states. Both court cases are being conducted in Southern California courtrooms.

The DOJ’s filing of charges came rather speedily, compared to other cases involving fraudulent clinical laboratory testing schemes pre-pandemic. The amount of money each defendant managed to generate in reimbursement from the fraud represents tens of thousands of patients. If feds were paying $100 per COVID-19 test, then the $153 million represents 153,000 patients, in just 18 to 24 months.

Assistant Attorney General Kenneth A. Polite, Jr.

“Today’s announcement marks the largest-ever coordinated law enforcement action in the United States targeting healthcare fraud schemes that exploit the COVID-19 pandemic,” said Assistant Attorney General Kenneth A. Polite, Jr. (above), in an April 20 DOJ press release. “The Criminal Division’s Health Care Fraud Unit and our partners are committed to rooting out pandemic-related fraud and holding accountable anyone seeking to profit from a public health emergency.” Clinical laboratory managers may want to pay close attention to the DOJ’s prosecution of these newest cases of alleged COVID-19 fraud. (Photo copyright: Department of Justice.)

Matias Clinical Laboratory, Inc.

The DOJ first brought fraud charges against Lourdes Navarro, owner of Matias Clinical Laboratory (Matias) in Baldwin Park, California, in April 2022. The Dark Daily covered that federal crackdown in “California Clinical Laboratory Owners among 21 Defendants Indicted or Criminally Charged for COVID-19 Test Fraud and Other Schemes Totaling $214 Million.

Then, in April of 2023, the DOJ filed expanded charges against the 18 defendants, including the owners of Matias which provided COVID-19 screening for schools, rehab facilities, and eldercare facilities, according to a United States Attorney’s Office, Central District of California press release.

Prosecutors allege that Navarro and her husband, Imran Shams, who operated Matias—also known as Health Care Providers Laboratory—perpetrated a scheme to perform medically unnecessary respiratory pathogen panel (RPP) tests on specimens collected for COVID-19 testing, even though physicians had not ordered the RPP tests and the specimens were collected from asymptomatic individuals.

In some cases, the indictment alleges, Navarro and Shams paid kickbacks and bribes to obtain the samples.

The indictment notes that reimbursement for RPP and other respiratory pathogen tests is generally “several times higher” than reimbursement for COVID-19 testing. Claims for the tests were submitted to Medicare and an unidentified private insurer, as well as the HRSA COVID-19 Uninsured Program, which provided support for COVID-19 testing and treatment for uninsured patients.

Claims to the HRSA falsely represented that “the tested individuals had been diagnosed with COVID-19, when in truth and in fact, the individuals had not been diagnosed with COVID-19 and the tests were for screening purposes only,” the First Superseding Indictment states.

The indictment further states that both Navarro and Shams had previously been barred from participating in Medicare and other federal healthcare programs due to past fraud convictions. Navarro, the indictment alleges, was reinstated in December 2018 after submitting a “false and fraudulent” application to the HHS Office of Inspector General.

It also alleges that Navarro and Shams concealed their ownership role in Matias so the lab could maintain billing privileges.

More Alleged Abuse of HRSA Uninsured Program

In a separate case, Federal prosecutors alleged that Anthony Hao Dinh, DO, an ear, nose, and throat physician in Orange County, California, engaged in a scheme to defraud the HRSA COVID-19 Uninsured Program as well.

Dinh, prosecutors allege, “submitted fraudulent claims for treatment of patients who were insured, billed for services that were not rendered, and billed for services that were not medically necessary.”

The criminal complaint, filed on April 10, alleges that Dinh submitted claims for approximately $230 million, enough to make him the program’s second-highest biller. He was paid more than $153 million, prosecutors allege, and “used fraud proceeds for high-risk options trading, losing over $100 million from November 2020 through February 2022,” states the US Attorney’s Office, Central District of California press release.

Dinh was also charged for allegedly attempting to defraud the federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. He faces a maximum sentence of 50 years in federal prison, the press release states.

Dinh’s sister, Hang Trinh Dinh, 64, of Lake Forest, California, and Matthew Hoang Ho, 65, of Melbourne, Florida, are also charged in the complaint, the Los Angeles Times reported.

Both of these cases are notable because of the size of the fraud each defendant pulled off involving COVID-19 lab testing. Clinical laboratory managers may want to review the original court indictments. The documents show the brazenness of these fraudsters and detail how they may have induced other doctors to refer them testing specimens.

Stephen Beale

Related Information:

Justice Department Announces Nationwide Coordinated Law Enforcement Action to Combat COVID-19 Health Care Fraud

DOJ Announces Nationwide Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19—Summary of Criminal Charges

Criminal Complaint: US v. Dinh, et al.

Criminal Complaint: US v. Navarro

Newport Coast Physician Faces Federal Charges in Healthcare Fraud Cases

COVID Fraud Takedowns: Feds Charge 18 People, Including Doctors, with Raking in Nearly $500M from Scams

California Clinical Laboratory Owners among 21 Defendants Indicted or Criminally Charged for COVID-19 Test Fraud and Other Schemes Totaling $214 Million

Free Webinar: Post-COVID Pivot: How to Expand Your Network for Doctor Referrals, Know What Tests are in Demand Now, and Actually Get Paid for the Work You Do

PRESS RELEASE FOR IMMEDIATE RELEASE THE DARK REPORT21806 Briarcliff Dr.Spicewood, TX 78669512-264-7103 o512-264-0969 f Media Contact: Bill Sinagrainfo@darkreport.com Free Webinar: Post-COVID Pivot: How to Expand Your Network for Doctor Referrals, Know What Tests are in Demand Now, and Actually Get Paid for the Work You Do AUSTIN, TEXAS (August 18, 2022) –During the COVID-19 pandemic, many labs came to rely on COVID testing for the majority of their revenue. But now that such testing is...

Multiple Blue Cross Insurers Sue Nebraska-based Clinical Laboratory Company for Alleged COVID-19 Test Price Gouging

Insurers from three states claim pandemic start-up medical lab company charged as much as $979 for SARS-CoV-2 PCR test

In an unprecedented move, Blue Cross insurers in three states are suing a clinical laboratory company in Nebraska for test price gouging during the COVID-19 pandemic. The lawsuit claims that the lab company charged as much as 10 times more than other labs for similar tests.

The interesting twist to the pricing aspect of this story is that the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) requires insurers to pay the full publicly-posted cost of COVID-19 testing. This means that, in many cases, the insurers may have no choice but to pay.

In three separate lawsuits, Blue Cross Blue Shield of Kansas City (Blue KC), Premera Blue Cross, and Blue Cross Blue Shield of Minnesota (BCBS of Minnesota) charged that Nebraska-based GS Labs charged as much as $979 for a SARS-CoV-2 PCR test, a test for which Medicare pays about $51, according to State of Reform.

Is GS Labs, which was formed by an investment firm in the early months of the COVID-19 pandemic, yet another example of unscrupulous clinical laboratory operators taking advantage of the demand for COVID-19 testing during the early years of the coronavirus pandemic? GS Labs says no. The courts will decide.

Graphic from Premera Blue Cross court documents

Taken from the Premera Blue Cross court documents, the chart above shows GS Labs’ test prices compared with Medicare reimbursement rates. “As demonstrated by the following chart, the prices GS Labs charges insurers for COVID-19 testing well exceed the reimbursement rates set by Medicare Administrative Contractors, and in some cases are nearly ten times Medicare rates,” Premera states in the documents. Nevertheless, the federal CARES Act requires insurers to pay any COVID-19 test price a clinical laboratory posts publicly on its website. (Graphic copyright: Premera Blue Cross.)

Responding to Nationwide Demand for COVID-19 Testing

In October 2020, GS Labs began offering COVID-19 tests to provide Omaha residents with “convenient and quick testing options with same-day appointments and same-day results,” according to the company’s website. In response to nationwide demand, GS Labs quickly opened more than 20 testing COVID-19 testing sites across multiple states in its first three months of operations.

Today, GS Labs operates 14 rapid COVID testing locations in Iowa (1), Minnesota (6), Nebraska (1), Oregon (1) and Washington (5), but is under fire in several states for alleged price gouging.

Blue Cross Blue Shield of Kansas City was the first insurer to file suit in July 2021, alleging unreasonable reimbursement rates. The Kansas City Business Journal reported that GS Labs responded with a counter suit a month later accusing Blue KC of a “reckless disregard for the law” and attempting to bully its way out of paying for $9.7 million in COVID-19 testing fees.

The CARES Act states that, in the absence of a contractual payment agreement, insurers are required to pay the “cash prices” testing providers post on their public websites.

Christopher Erickson, a GS Labs Partner, told The New York Times (NYT), the law is on GS Labs’ side. “Insurers are obligated to pay cash price, unless we come to a negotiated rate,” he said.

In the fall of 2021, Premera Blue Cross also filed suit in Washington state alleging the lab routinely uses deceptive practices to run multiple unnecessary COVID tests on patients at an inflated cost. “In the words of one former employee, it ‘manipulates people into thinking they need all three COVID [sic] test’ that GS Labs offers, such that ‘[p]atients are being lied to just so th[e] company can make a profit,’” court documents state.

Premera also alleges in its lawsuit that GS Labs failed to report test results in a timely manner and returned hundreds of tests that were “by its own admission, tainted by “deviat[ions] from applicable laboratory standards for testing facilities.”

“This is fraud, and it’s fraud against Premera, it’s fraud against the industry, and more importantly, it’s fraud against the customers,” Courtney Wallace, DNP, Premera’s Director of Strategic Communications, told Washington State Wire.

And earlier this year, Blue Cross Blue Shield of Minnesota sued GS Labs to recover more than $10 million in over payments made since the start of the pandemic. A BCBS of Minnesota new release states that GS Labs “consistently charged more than five times the median market rate for its most commonly administered COVID-19 diagnostic test.”

CMS Inspection Finds GS Labs Site Posed “Immediate Jeopardy”

APM Reports spent nearly a year investigating the startup lab. Its team of journalists interviewed more than 65 GS Labs customers, former employees, and public health professionals, and reviewed thousands of pages of public documents. It concluded the lab “at times delivered inaccurate results, faced backlogs, charged high prices, and pushed customers into unnecessary tests.”

The APM Reports investigators found:

  • The company was slow to inform public health officials in several states about positive cases and in a few instances reported negative results to patients who had COVID-19. Other patients never received test results or received someone else’s results.
  • Overwhelmed by the number of tests it was processing, GS Labs at one point had a month-long backlog of untested samples.
  • A 2021 Centers for Medicare and Medicaid Services inspection of GS Labs’ Omaha facility found the lab posed “immediate jeopardy,” potentially putting patients at risk for serious harm.
  • Health officials in three states found GS Labs’ work was slower and less reliable than other labs.

According to APM Reports, in an email to colleagues about flaws in GS Labs’ operation in Washington state, Melissa Pond, [then] Program Manager for Clark County Washington’s COVID-19 Response Team, wrote, “[It] makes me so angry that they brought their greed to our community. They just popped up to make money knowing they would fly under the radar as long as possible and close their doors when someone caught them!”

Providing COVID-19 Testing During a Time of Need

APM Reports noted GS Labs’ founders formed the company in the early days of the pandemic after their friends and family could not find tests following a COVID exposure.

GS Labs is a subsidiary of City+Ventures, an Omaha investment and development company. Its portfolio includes an aviation investment company, car wash chain, car dealerships, restaurants, and other businesses.

City+Ventures’ co-founders, Erickson and Danny White had no healthcare investments prior to 2020, APM Reports noted. But early that year, the two men had joined with Gabe Sullivan and Darin Jackson, MD, who currently owns Prestige Medical Laser Solutions in Omaha, to create a men’s health and anti-aging company called 88MED. During the pandemic, that company transitioned to COVID-19 testing and was renamed GS Labs. 

It is worth noting that GS Labs responded at length and in detail to the questions raised by the APM Reports investigation. It is useful reading for clinical laboratory leaders who wish to be fully informed on both sides of the controversy.

In its rebuttal, the company pointed out it had processed more than 2.1 million tests nationwide with less than 1.5% of its results being called into question. It maintained “GS Labs’ policy has never been to ‘push’ tests on anyone” and stated its cash prices “were higher than some testing providers,” but “lower than others” and reflected the company’s significant start-up costs.

GS Labs wrote, “At a time when our communities desperately needed increased COVID testing capacity, GS Labs took action to deliver that testing, investing more than $150 million in a business whose prospective success and lifespan were extremely uncertain. By filling a critical gap in COVID testing, GS Labs literally saved lives, and we are extremely proud of the service that we have provided to the communities we serve.”

GS Labs also has countersued BCBS of Minnesota, denying all prior allegations made by the insurer and alleging 21 counter claims.

Sabrina Corlette, JD, Research Professor and Project Director at Georgetown University Center on Health Insurance Reforms, has studied coronavirus testing prices. She told the NYT, “This is not like neurosurgery where you might want to pay a premium for someone to have years of experience.” She pointed out the CARES Act may provide GS Labs with the legal grounds to charge above market prices.

“Whatever price the lab puts on their public-facing website, that is what has to be paid,” she said.

GS Labs may have found a legal loophole to justify its sky-high COVID-19 testing prices, but consumers may view this behavior by a clinical laboratory company as unethical and yet another reason to be disillusioned with America’s healthcare system.

Andrea Downing Peck

Related Information:

Blue Cross and Blue Shield of Kansas City v. GS Labs, LLC

Lawsuit Seeks a Judgment to Ensure Blue KC Members Are Not Required to Pay GS Labs’ COVID-19 Testing Reimbursement Demands

Lab Files Counter Claim Against Blue KC in Price Gouging Dispute

GS Labs’ Responses to Questions from APM Reports

Blue Cross and Blue Shield of Minnesota Files Lawsuit Against GS Labs

Premera Blue Cross vs. GS Labs, LLC

Premera Sues GS Labs, Alleging COVID Price Gouging

This Lab Charges $380 for a COVID Test. Is That What Congress Had in Mind?

Testing the Limits

CMS Complaint Against Omaha GS Labs, LLC

Milestone for National Testing Laboratory: GS Labs Tests One Millionth Patient For COVID-19 As Pandemic Continues to Challenge Nation

GS Labs Countersues Blue Cross Blue Shield of Minnesota: Federal Court Filing Accuses Insurer of Antitrust Violations, Conspiring with Cartel of BCBS Affiliates, Violating CARES ACT, False Advertising and Consumer Fraud

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