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Exact Sciences Sues BCBS of North Carolina for Refusing to Pay Cologuard Claims

NEW YORK (GenomeWeb) – Exact Sciences has filed a lawsuit against Blue Cross Blue Shield of North Carolina (BCBS-NC) in the United States District Court for the Middle District of North Carolina for "improperly and illegally adopt[ing] an official policy of denying benefits and refusing to pay Exact for the costs of performing Exact's proprietary colorectal cancer screening test, Cologuard."

The company alleges BCBS-NC has "improperly and illegally" refused more than $410,000 in payments, starting in October 2014 and continuing to the present.

Earlier this month, Exact also sued insurer Humana for denying payments for the same test. In that suit, filed with the Louisville division of the District Court for the Western District of Kentucky, Exact alleges that the insurer has been denying claims for Cologuard since at least October 2014, and estimates Humana owes it at least $800,000 in payment for 4,664 Cologuard tests it has performed since that time.

As in the Humana lawsuit, Exact alleges that BCBS-NC has violated its duties under the Employee Retirement Income Security Act (ERISA) and state law. The company said it billed BCBS-NC for 936 Cologuard tests performed in at least nine states for a total bill in excess of $568,000.

Further, Exact said, North Carolina law requires insurers to cover tests for colorectal cancer screening that are recommended by the American Cancer Society or otherwise in accordance with established medical practice. But BCBS-NC "appears to have adopted an official policy, in clear violation of the coverage mandate, of excluding Cologuard as, according to BCBS-NC, 'Experimental or Investigational' and not 'Medically Necessary,'" according to the suit.

Exact also said it has exhausted all available appeals procedures, submitting 211 internal appeals, 204 of which were denied or ignored.

The suit's causes of action include a claim for benefits under ERISA, various violations of fiduciary duties under ERISA and state laws, denial of fair reviews, breach of contract, and unfair or deceptive business practices.

"By refusing to pay Exact for the treatment that Exact provided to BCBS-NC subscribers, BCBS-NC has been unjustly enriched," Exact wrote in the court documents. "As the result of BCBS-NC's unlawful, unjust, and wrongful acts, Exact suffered and continues to suffer damages, and it is owed restitution from BCBS-NC."

The company has asked the court to declare the insurer to be in violation of its fiduciary duties and the law, and to award Exact lost profits, contractual damages, compensatory damages, exemplary damages, restitution for the "improperly withheld" reimbursements, and attorneys' fees.