Illinois congressman steps in after feds fail to reimburse COVID-19 testing labs
CHICAGO (CBS) -- A local entrepreneur made a multimillion-dollar investment at the height of the COVID-19 pandemic, with the expectation that she would be paid back by the federal government.
She has not received a cent.
We previously told you about small business owner Janine Morabito's struggle after getting stiffed by Uncle Sam. Now, CBS 2's Lauren Victory has found several others are in the same boat, and an Illinois politician is taking notice of their plight.
Our last conversation last month with Morabito left her teary-eyed, calling her situation a "life-ruiner." To recap, the Chicago entrepreneur opened Mercury Lab for COVID testing during the height of the pandemic.
Coronavirus testing would be reimbursed by the federal government's Health Resources and Services Administration as part of the COVID-19 Uninsured Program.
Morabito's team submitted more than 35,000 claims for rapid and PCR tests – which added up to $6.8 million. She kept checking on those unpaid tests for more than a year and a half.
In October, the feds told CBS 2 that no reimbursements would be coming to Morabito at all. The Health Resources and Services Administration wrote:
"While we cannot comment on individual cases, due to a lack of sufficient funds, the COVID-19 Uninsured Program had to stop accepting claims in Spring of 2022. Congress then passed the Fiscal Responsibility Act this year, which rescinded remaining program funds; therefore, no additional claims payments will be made under the Uninsured Program. The law rescinded the remaining non-operating funds from Provider Relief Fund programs, including the Uninsured Program."
"I had to grieve for a couple of days, and then I felt so much better - because now, at least I know. They're not going to pay us," Morabito said. "So now what can we do?"
After that shocking update, CBS 2 has learned several COVID testing lab owners are asking the same question.
Some are giving up and going the legal route. A California provider is suing for $64 million, a Texas hospital for $6.5 million.
CBS 2 spoke with leaders from a third health care company that did not want to be named. They are also exploring legal action for hundreds of thousands of dollars in unpaid tests.
It is a hole worth tens of millions of dollars that has prevented their business from growing.
"It is shameful that we couldn't have come up with a resolution a year and a half ago," Morabito said.
Morabito's Mercury Lab might file a lawsuit too – which would ultimately cost taxpayers.
"Having to go to court is going to be a lot more expensive for everyone - for our government, and for us," Morabito said. "So we really need to try to fix this legislatively."
Enter U.S. Rep. Brad Schneider (D-Illinois), who said the issue "absolutely" has his attention. He and several other members of the Congress voted to deal with the country's debt ceiling this spring.
"If we didn't pass that bill, the government was going to default on its debt," Schneider said.
Passing what was called the Fiscal Responsibility Act had consequences for the Health Resources and Services Administration. The bill cut $6.8 billion for COVID-19 programming – leaving no money to reimburse Morabito.
Victory: "Are you worried that if people like Janine and other providers lose trust in the government, that they might not be there to help the government the next time something health-related happens?"
Schneider: "That's a great question."
And it is why Schneider recently co-sponsored a measure to pay back providers involved in the COVID-19 Uninsured Program – all as part of an amendment to a separate bill.
Victory: "What other legislative solutions are there?"
Schneider: "So, there's no clear path. We're trying to either find a path, or make a path to get it done. Our goal is to not let up until the problem is resolved."
Morabito said because of CBS 2's inquiries, Rep. Schneider reached out to her. She feels some encouragement with a congressman on her side, and hopes legislators are listening.
"People worked so hard. They came to your aid. They used their own money," Morabito said. "Do the right thing. Pay people."
She says that with the clock having been ticking for almost two years.
When asked about Schneider's co-sponsored amendment that would pay back providers who are part of the COVID-19 Uninsured Program, the Health Resources and Services Administration said, "We generally don't comment on proposed legislation."
The U.S. House of Representatives met late into the night Tuesday to talk about the giant spending bill – with a tiny part in it that mentions the COVID-19 Uninsured Program in which Morabito and others participated.
Rep. Schneider's amendment passed, but Congress has put voting on the overall bill on hold.
