Covid-19 testing company hampers public health response and frustrates consumers for more than a year
This story was co-produced by KUOW and American Public Media.
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maha-based GS Labs, which operates five sites in Washington, is under investigation by state and federal authorities.
A private Covid-19 testing company that claims to be one of the largest in the state continues to operate across Washington despite a history of frustrating consumers and public health officials.
The Nebraska-based GS Labs operates five Covid testing sites in Washington. The company began raising concerns within weeks of opening its first location in the state, in December 2020, when some consumers and company employees complained of high prices and unnecessary testing. In the spring, officials with both the state and county health departments dealt with the fallout of hundreds of backlogged test results, some of which arrived three weeks after the patient samples were collected. Even after one of those local officials sent a complaint to the state, GS Labs continued to operate through fall 2021. And it continued to deliver results weeks late, or not at all, making it nearly impossible for public health workers to track and trace those cases.
“Sheesh!!” wrote then Snohomish County case investigation supervisor Andrew Nguyen in October, after hearing about another delayed result, in an email obtained through a records request. “This lab shouldn’t even be around with these delayed responses and lack of accuracy etc.”
The problems in Washington were uncovered as part of a larger investigation into GS Labs, which has operated testing sites across the country and currently has locations in six states. A team of journalists with APM Reports – the investigative reporting unit of American Public Media – spent nearly a year examining the company’s track record of testing. Journalists interviewed more than 65 consumers, employees and public health officials, and reviewed public records from 11 states and federal court filings from four lawsuits.
The investigation found that in at least six states GS Labs struggled with backlogs of test results, some involving thousands of tests at a time, reported to public health officials up to months late. A dozen employees in seven states told APM Reports that GS Labs pushed customers to submit to all three kinds of tests that the company offered. Three health insurance companies, including Premera in Washington, have accused the company of “price gouging.” Premera is suing GS Labs in federal court for attempting to exploit the pandemic by subjecting patients to “expensive and medically unnecessary testing” that, through early January, ran as high as $979 for a PCR test. GS Labs is countersuing in two of the cases (in Missouri and Minnesota) and in Minnesota filed a lawsuit against the insurer Medica seeking payment for Covid-19 tests.
Officials with GS Labs declined interview requests. In response to written questions from APM Reports, a company spokesperson asserted that GS Labs has addressed complaints about its performance, which occurred largely while the company was expanding its operations during the first two years of the pandemic. “While GS Labs aimed for perfection, few businesses can credibly claim to have achieved perfection operating during the pandemic,” the company said in a statement. GS Labs claims that the vast majority of the 2.1 million tests it has performed, as of May, were reported quickly to public health authorities and helped prevent spread of the virus.
“At a time when our communities desperately needed increased COVID testing capacity, GS Labs took action to deliver that testing, investing more than $150 million in a business whose prospective success and lifespan were extremely uncertain,” the company’s written statement said. “By filling a critical gap in COVID testing, GS Labs literally saved lives, and we are extremely proud of the service that we have provided to the communities we serve.”
But the company’s track record in many of those communities has attracted the scrutiny of regulators.
The Washington state Department of Health is actively investigating GS Labs. So are authorities in Kansas and Nebraska, as well as the U.S. Department of Health and Human Services.
But the company continues to operate as normal. In southwestern Washington’s Clark County, officials worry about the impact that might have on their community.
A year of complaints, little action
GS Labs began operating in Vancouver, in Clark County, in spring 2021. For a time, the company followed the state reporting rules, which say that Covid-19 testing facilities must immediately submit positive results to the local health department so officials can perform contact tracing and hopefully curtail spread of the virus.
“Then they just stopped,” said Dana Nguyen, who leads Clark County’s Covid-19 response team. In mid-May 2021, the company was nine days late in reporting a batch of PCR results, and when it did report them, the results were missing demographic information.
That particular issue was resolved, but three weeks later, on June 10, Clark County got a phone call from a concerned resident who had tested positive for Covid and wanted to know why health officials hadn’t called to begin contact tracing. Nguyen took that call herself. News of the positive test made her realize that GS Labs was still failing to report all results. She worried that the problem presented a more widespread threat to the county’s health. “Typically, that’s just the tip of the iceberg,” she said.
The next day, Nguyen spoke with Alex Blankenburg of City+Ventures, GS Labs’ parent company in Omaha, and he confirmed her fears: GS Labs had not reported any PCR results from its Vancouver location for the previous three weeks. That included 26 positive cases.
Nguyen and Blankenburg had a call with state officials, during which “it was communicated very clearly” that an “immediate investigation” would begin, according to emails and a complaint that Nguyen filed with the state.
But 10 days later, on June 21, GS Labs voluntarily terminated its license to process rapid tests in Vancouver. Because the Vancouver facility no longer held a license, the state health department could not investigate it, according to an email Nguyen received from Honora Estes with the state health department.
In response to questions from APM Reports, GS Labs blamed its reporting struggles in Washington on a “balkanized and inefficient” reporting system that required providers to send results to individual counties based on the patient’s residence. But according to the Washington health department, a testing provider would only be expected to submit results this way if it hadn’t set up the state’s preferred method of electronic reporting, which GS Labs had not done.
The closing of the Vancouver site meant that Clark County wouldn’t deal with GS Labs for the next few months, but elsewhere in the state, the company’s challenges persisted. Snohomish County had already fielded complaints from GS Labs customers about conflicting results and received enough tardy reports from the company that health officials came to expect it.
“GS Labs. There’s a shocker!” county case investigator Lorraine Bartosh wrote in an email to colleagues in May 2021 following news of backlogged PCR tests from the company.
King County also saw delayed results in 2021, which overlapped with Clark County’s troubles and lasted into the summer. On Sept. 1, Blankenburg emailed King County epidemiologist Grant Donovan to tell him that 125 results had been reported up to three weeks late because “our PCR volume increased by 10X in the span of 2 weeks.”
In its statement to APM Reports, GS Labs said the delay was due to “a significant spike in PCR testing due to the Delta surge,” and that the backlog prompted the company to make "significant investments to dramatically expand its laboratory capacity.”
On Sept. 8, the state health department sent GS Labs what some officials referred to internally as a “bad actor” letter, warning about “poor data quality” and a “lack of quality assurance that is not acceptable and endangers the health of Washingtonians.”
Blankenburg responded by complaining that the state wouldn’t accept the company’s preferred reporting format. He said testing delays were due to the “recent surge in testing demand.” As for inaccurate and conflicting test results, Blankenburg blamed the patients, saying they entered their information incorrectly when signing up for appointments.
A few weeks later, Tami Lorene Zevenbergen took her daughter to get tested at the GS Labs in Lynnwood. They wanted a single rapid test, but according to Zevenbergen, the nurse pressured them to get all three: a rapid, a PCR, and an antibody test.
Zevenbergen had to restrain her screaming 9-year-old as a nurse swabbed her nostril and pricked her thumb.
Zevenbergen is one of at least six consumers and one employee who complained to the Washington Attorney General alleging unnecessary testing, price-gouging, late results, or being billed for unwanted tests, according to public documents. Six of those complaints were closed. The Attorney General’s office wouldn’t comment on Zevenbergen’s complaint. It also wouldn’t say whether it was investigating other complaints against GS Labs, but many of the records it provided to APM Reports were redacted because they contained information gathered "in litigation or in anticipation of litigation," as specified by exemptions to Washington's public records law.
The state Office of the Insurance Commissioner also considered investigating the company, for its billing practices, but decided that “it did not see any definitive criminal charges at the state level,” according to an email written in April 2021 by Bruce Lantz, with the office’s Criminal Investigations Unit. The director of the Criminal Investigations Unit wrote an email in October saying the agency agreed to defer to the Kansas Insurance Department, which is investigating the company, according to documents obtained by APM Reports through a records request.
Lantz also said his agency was willing to help any federal regulators with an investigation. The Office of Inspector General for the U.S. Department of Health and Human Services confirmed in an email to APM Reports that it is investigating GS Labs.
Since sending the “bad actor” letter in September, the state health department has received more complaints about the company, both from consumers and local health officials. Department officials declined interview requests, but spokesperson Katie Pope said the health department launched an investigation into GS Labs in November.
Asked to comment on the investigations, the company wrote, “GS Labs has gladly cooperated with all government oversight. We welcome the opportunity to provide transparency into our operations and to address whatever questions the government may have.”
GS Labs also said that it “prioritized transparency with public-health agencies, even when that transparency did not paint the company in the best light.” However, according to the Washington health department, GS Labs did not inform officials about an October inspection report concerning its lab in Omaha, which processed every PCR test the company collected, whether in Nebraska, Washington, or elsewhere. An inspector with the federal Centers for Medicare and Medicaid Services found that a series of deficiencies related to quality control meant the PCR lab posed “immediate jeopardy” to public health.
GS Labs corrected the problems and resumed PCR testing in a new lab that it opened in October.
One of the recent complaints in Washington came, again, from Clark County. Around Sept. 1, having renewed its license, GS Labs reopened its Vancouver facility; on Oct. 5, Nguyen alerted state officials that she had received dozens of incomplete results from the site and heard from residents that they never received their results from the company. She sent another complaint in January after residents said GS Labs reported their results incorrectly to the county. That time, she said, the company addressed the issue quickly.
More than a year after Nguyen fielded that first call, GS Labs continues to operate five sites in Washington. She says that when the health department can’t perform thorough Covid case investigations — and when that affects people personally, like the caller in June 2021 — residents may lose trust in public health institutions.
“If our community doesn’t trust what we’re doing and doesn’t believe that we’ve got their best interests in mind, they aren’t going to let us help them,” Nguyen said.
