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Law360 (June 2, 2021, 6:28 PM EDT) -- UnitedHealth units were hit with a lawsuit Wednesday by a New Jersey medical testing laboratory alleging the insurer shirked its duty to cover tens of thousands of claims for COVID-19 tests, despite earning billions of dollars in profits last year as the pandemic swept the nation.
Genesis Laboratory Management LLC says the insurance giant has failed to reimburse it for 51,000 legitimate claims for coronavirus diagnostic tests that it "provided and continues to provide" to United's insureds, in violation of state and federal laws. Additionally, the defendants subjected the lab to burdensome medical records requests and in some cases denied claims for immaterial reasons, Genesis alleged.
Genesis said the conduct of the insurance company, which reported $15.4 billion in earnings last year as other businesses grappled with the pandemic's economic crunch, contravenes congressional mandates that insurers must cover coronavirus testing.
"Genesis has been, and continues to be, harmed by United's failure to pay valid claims that Genesis submitted to United for reimbursement for services to United's members and beneficiaries," the complaint said.
The lab is seeking compensatory damages and attorney fees. The defendants are UnitedHealth Group Inc., United Healthcare Services Inc. and Oxford Health Plans Inc.
Oakhurst, New Jersey-based Genesis is a molecular diagnostic and anatomic pathology lab that's provided coronavirus testing services around the clock to help clinicians diagnose the virus and detect the presence of its antibodies, the complaint said. The lab is an out-of-network provider, "notwithstanding multiple attempts to become in-network with United," according to the complaint.
United paid the majority of the lab's claims for March, April and May 2020, but it began "systematically denying" payment for claims starting in June 2020 even though the lab didn't change its testing, billing or documentation practices, the complaint said.
Genesis claimed it has never refused to treat United's members, despite the insurer's failure to pay or its demands that the lab "produce voluminous patient treatment and other records with tight response time demand."
The lab pointed out that in addition to the billions in earnings United made last year as other businesses struggled, the insurer reported that its first-quarter 2021 revenues jumped by 9%.
"United's actions are particularly reprehensible given the increased operational costs and burdens that Genesis has undertaken to join the State of New Jersey in the fight against COVID-19," the complaint said.
Congress, along with the Trump and Biden administrations, has said that group health plans and health insurance issuers like the United defendants have to cover coronavirus testing and related services, the complaint said, pointing to provisions of the Families First Coronavirus Response Act and the Coronavirus Aid, Relief and Economic Security Act.
Genesis' complaint likewise accused United of violating New Jersey's Healthcare Information Networks and Technologies Act and the state's Health Claims Authorization, Processing and Payment Act. The complaint also asserts claims of breach of implied contract, breach of the covenant of good faith and fair dealing, unjust enrichment, quantum meruit and promissory estoppel.
"We disagree with the allegations in the complaint and intend to vigorously defend ourselves in this matter," read a statement emailed by a United representative.
Counsel for Genesis didn't immediately respond to a request for comment.
Genesis is represented by Craig Carpenito, James W. Boswell and Jennifer S. Lewin of King & Spalding LLP.
Counsel information for the United defendants was not immediately available.
The case is Genesis Laboratory Management LLC v. United Health Group Inc. et al., case number 3:21-cv-12057, in the U.S. District Court for the District of New Jersey.
--Editing by Daniel King.
Update: This article has been updated to include a statement from United.
For a reprint of this article, please contact reprints@law360.com.
