U.S. Court in California Rejects Lab’s Lawsuit Against Blue Shield over COVID-19 Testing Reimbursement
- January 13, 2023
The U.S. District Court for the Northern District of California rejected January 6 for a second time a putative class action against Blue Shield of California Life and Health Insurance Company (Blue Shield) for failing to fully reimburse out-of-network health care providers for COVID-19 tests.
Plaintiff Saloojas, Inc., which operated specimen collection sites for COVID testing, brought the lawsuit in July 2022 arguing that the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (FFCRA) required insurers to reimburse providers of diagnostic testing at “an amount that equals the cash price for such service as listed by the provider on a public internet website.”
In an October 2022 ruling, the court found that the claim failed as a matter of law because the CARES Act and FFCRA do not include a private right of action against insurers to recover reimbursement for COVID-19 testing at their publicly posted cash price.
The court dismissed the remainder of plaintiff’s lawsuit, but granted leave to amend certain claims, including its “unlawful, unfair, and fraudulent business acts and practices” (UCL) claim under California law.
Blue Shield moved to dismiss the amended complaint. The court granted the motion.
The court held the UCL claim failed because Saloojas did not show that Blue Shield’s conduct was unlawful as plaintiff failed to establish that it listed a cash price for COVID-19 testing on a public website as required by the CARES Act. Plaintiff also failed to plead any facts to support its “conclusory allegation” that Blue Shield failed to reimburse Saloojas in accordance with California law.
Plaintiff also did not sufficiently allege that Blue Shield engaged in racketeering activity.
Saloojas, Inc. v. Blue Shield of Cal. Life and Health Ins. Co., No. 22-cv-03267-MMC (N.D. Cal. Sept. 30, 2022).