Court Finds No Implied Private Right of Action for Inadequate Reimbursement of COVID-19 Testing

An out-of-network health care provider sued an insurer under the Coronavirus Aid, Relief, and Economic Security (CARES) Act for failing to reimburse the full cost of COVID-19 testing as posted on the provider’s public website. As background, the CARES Act and related agency guidance require group health plans and insurers to cover COVID-19 diagnostic testing without cost-sharing, prior authorization, or other medical management requirements. Unless the plan or insurer and the provider have agreed on a negotiated rate, the plan or insurer must pay for the testing at the cash rate posted by the provider on its public website (see our Checkpoint article). Here, the insurer asked the court to dismiss the provider’s case, arguing that the CARES Act does not provide a private right of action that would allow the provider to sue for reimbursement. The provider conceded that the CARES Act does not provide an express right of action but argued that an implied right of action allows for legal challenges of improper reimbursement.

Disagreeing with another district court’s decision in Diagnostic Affiliates of N.E. Hou, LLC v. United Healthcare Servs. (see our Checkpoint article), the court held that neither the CARES Act nor the Families First Coronavirus Response Act (FFCRA) provides an implied private right of action. The court concluded that the text and structure of the statutes do not show congressional intent to create a private right of action for COVID-19 testing providers. While the Diagnostic Affiliates court reasoned that it was more appropriate to permit an implied right of action than to interpret the statutes as creating a right without a remedy, this court concluded that such concerns were not sufficient evidence of statutory intent. Crucially, the court stated, “Although there is no [statutory] indication of intent to deny a remedy, that is not enough to imply one.” Therefore, the court dismissed the case but granted the provider leave to amend its complaint to seek payment of benefits under ERISA.

EBIA Comment: While courts disagree as to the remedies available to providers that are underpaid for COVID-19 testing, the ongoing litigation should serve as a caution to insurers and sponsors of self-insured health plans. With the COVID-19 pandemic now entering its third year, plans should have well-established processes to ensure compliance with the diagnostic testing coverage requirements. It is noteworthy that this provider set its cash price for COVID-19 diagnostic tests at more than $900. It would be helpful if the agencies would issue guidance to combat apparent profiteering by certain providers. For more information, see EBIA’s Group Health Plan Mandates manual at Section XVI.C (“COVID-19: Mandated Coverage of Diagnostic and Preventive Services”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C.11 (“Coverage Mandates Relating to the COVID-19 Pandemic”) and EBIA’s Consumer-Driven Health Care manual at Section X.H (“COVID-19 Testing and Treatment”).

Contributing Editors: EBIA Staff.