A federal judge has dismissed the majority of a $3.8 million lawsuit filed by Abira Medical Laboratories LLC, operating as Genesis Diagnostics, against Anthem Blue Cross Blue Shield of Connecticut. The suit, involving nearly 3,000 unpaid insurance claims related to medical testing, was largely barred due to anti-assignment provisions, ERISA preemption, and contractual time limits.

In an order issued by U.S. District Judge Sarala V. Nagala, 1,197 claims were found governed by health plans with anti-assignment clauses, preventing Genesis Diagnostics from pursuing recovery. Additionally, 333 claims were preempted by the Employee Retirement Income Security Act of 1974 (ERISA), while 125 claims were dismissed as time-barred under the governing health plans.

The court also dismissed claims governed by the Federal Employee Health Benefits Act, citing federal preemption and absence of the necessary defendant. Claims under the Families First Coronavirus Response Act and the CARES Act were also dismissed due to the lack of a private right of action.

Judge Nagala emphasized that the amended complaint failed to establish a valid contract or proper assignment of claims from insured patients to Genesis Diagnostics, a laboratory that is out-of-network and without a reimbursement contract with Anthem.

Genesis Diagnostics filed the suit in May 2024, seeking payment for medical tests conducted from 2016 to 2020 on behalf of Anthem-insured patients. Anthem had initially moved to dismiss the suit in July 2024 and later filed an amended motion following discovery.

The insurer argued that many insurance policies barred the assignment of claims and that the claims involved at least 121 different insurance plans, making consolidation impractical.

While the court allowed Genesis a chance to amend its complaint to address some deficiencies, several claims, including those related to anti-assignment provisions and time limitations, were dismissed without leave to amend.

Genesis Diagnostics, a Pennsylvania-based lab employing approximately 150 staff, conducts a variety of clinical and genetic testing nationwide, including authorized COVID-19 testing for first responders.

The legal case, Abira Medical Laboratories LLC v. Anthem Blue Cross Blue Shield of Connecticut et al., is currently pending in the U.S. District Court for the District of Connecticut under case number 3:24-cv-00872.

Contacts:

• Anthem BCBS of Connecticut: Matthew Aaronson and Stefanie Cerrone, Troutman Pepper Locke LLP

• Abira Medical Laboratories LLC: Paul L. Fraulo and Jeremy Michael Doberman, Bochner PLLC