Years after pandemic, Bay Area families receiving bills for 'free' school COVID tests

SAN FRANCISCO (KGO) -- During the height of the pandemic, many Bay Area school children took part in what families say was advertised as free COVID-19 testing at schools covered by the CARES Act. But now three years later, some families say they're still receiving bills from the lab that conducted the tests. That lab is now suing health insurance companies for reimbursements they say they're owed.

As COVID raged during the early pandemic, COVID testing at schools was critical and welcomed.

"The testing was supposed to be free testing that we got that was performed by a laboratory that came to the school sites," said Debbie, an Orinda resident who asked that we not use her last name.

Debbie says her son had multiple COVID tests at school, facilitated by PMH Laboratory.

She says she received a letter in the mail dated February 26, 2021, stating, "PMH's sole compensation will be through insurance reimbursement or through the CARES act. No student, staff and/or family member will receive a bill from PMH from the services provided under any circumstance."

"The bills started coming probably about I would say eight months to a year later," said Debbie.

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She says she ignored them at first, but they kept on coming.

"Years," exclaimed Debbie.

"It's very frustrating to be getting these bills at least once a month," she continued.

Debbie's son's bill was for more than $300.

7 On Your Side reviewed another student's PMH bill for more than $1,000.

"We just want to get it resolved," said Debbie.

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Both families had Blue Shield of California insurance. 7 On Your Side reached out to Blue Shield and PMH.

In an emailed statement, PMH tells 7 On Your Side, it's general practice is not to invoice patients for COVID-19 testing during the public health emergency if patients provided insurance information at the time of testing, but that certain insurers improperly issued payment for the tests directly to the patient, instead of issuing the payment directly to PMH.

The lab claims this practice violated the CARES Act which specified the insurer "shall reimburse the provider" not the patient.

The lawsuit states, "Defendants' intent was to profit by issuing only partial payments to patients, and by forcing out of network providers like PMH to chase recovery of such lower payments from the patients."

In its statement to ABC7 News, PMH says this practice, "... placed an undue burden on patients to identify why they received the payment and to deliver the insurer's payment to PMH."

Also that it "... placed an undue burden on PMH to obtain the issued payment from the patient..."

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According to the lawsuit, as of December 1, 2022, Blue Shield owes PMH no less than $38,400,727.78 for COVID testing and services.

In its statement to 7 On Your Side, Blue Shield of California said it acted no differently with respect to PMH Laboratories, writing, "Blue Shield of California does not comment on pending litigation and cannot disclose any member information due to federal privacy law. With that said, we can state that we follow all applicable regulations and laws, including the CARES Act as it relates to COVID testing payment practices. Members are always encouraged to contact the customer service number on the back of their membership cards for any questions related to billing or COVID testing costs."

Debbie says she did receive payments from Blue Shield for the COVID tests and that she followed instructions to send those payments to PMH Laboratories. It's not clear why a balance remained and her son kept getting bills.

After 7 On Your Side contacted PMH, the attorney who filed the lawsuit against Blue Shield spoke with Debbie and said her bill would be resolved.

It's possible other families also received direct payments from an insurer but didn't understand what those checks were for or that they needed to pay PMH in return.

PMH tells ABC7 News it's committed to working with patients and that anyone receiving COVID-19 testing bills who isn't sure why can contact PMH's billing vendor to resolve their account by calling (877) 934-2430 or emailing questions@medusarcm.com.

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PMH Laboratory Inc.'s Statement Regarding Insurer Payments To Patients For COVID-19 Testing Services:

PMH Laboratory Inc.'s general practice and instruction is for its healthcare billing vendor not to invoice patients for COVID-19 testing or services conducted during the Public Health Emergency if patients provided insurance information at the time of testing. However, certain healthcare insurers on occasion improperly issued payment for the test directly to the patient/insured, rather than issuing payment directly to PMH. This insurer practice violates CARES Act section 3202(a)(2) and California Health & Safety Code section 1342.2(a)(4), which both specify that the insurer "shall reimburse the provider...", not the patient. The insurers' improper practice of issuing payment/checks to certain patients for forwarding to PMH placed an undue burden on patients to identify why they received the payment and to deliver the insurer's payment to PMH. This improper practice also placed an undue burden on PMH to obtain the issued payment from the patient and to properly account for any payment received. Upon being notified that an insurer issued payment directly to the patient for forwarding to PMH, PMH's vendor in turn issued a request for payment to the patient, and instructed that the patient forward the insurer payment/check to PMH's billing vendor, along with documentation received from the insurer that would enable proper accounting for the payment.

PMH is committed to working with patients to resolve the difficulties created by unfortunate and improper insurer practices. If a patient recently received a payment request relating to COVID-19 testing or services performed during the Public Health Emergency that they believe is inaccurate, or if they are unsure if they received a direct payment from their insurer, or if they believe they previously forwarded a received insurer payment to PMH, the patient can contact PMH's billing vendor to resolve the account at: (877) 934-2430 or questions@medusarcm.com.