the pandemic

The Dark Side of COVID Testing

Getting swabbed is usually free, but CareCube is accused of a scam to make customers pay.

Photo-Illustration: Intelligencer; Photo: Jason Scott Jones/THE CITY
Photo-Illustration: Intelligencer; Photo: Jason Scott Jones/THE CITY

It took only a few days before Rachel Ramirez started feeling sick after a nearby co-worker came down with COVID this past fall. Ramirez has lupus, which weakens her immune system, so she sought out a testing site near her Queens apartment that took her insurance. After a little bit of searching, she made an appointment at an upstart doctor’s office that recently opened between a discount pet-supply store and a bubble-tea joint on Steinway Street: CareCube.

While sitting in the waiting room, Ramirez noticed two receptionists were giving different rates to patients as they walked in. “They were telling people $175. It was outrageous. One person came in, and the representative looked at this person’s insurance card and said $275. The number kept varying for people,” she recalled. When it was her turn, however, the receptionist told Ramirez she didn’t owe anything: As with most COVID tests, insurance would cover it. After getting swabbed, Ramirez asked for a bill in writing that said she owed nothing out of pocket but was told it wasn’t necessary, so she left.

Ramirez didn’t think much about CareCube after she got her negative test result until the company sent her a $125 invoice a few weeks later. “You provide us your Insurance policy which was not covered covid-19 testing at the date of service,” the email said. An insurance representative told her that, contrary to the email, her insurance did cover a test for exposure — it was just that CareCube had told the insurance company that the reason she got tested was to return to work. That seemingly small distinction just so happens to be one of the few reasons that exempts insurers from paying for the tests.

For the next 16 days, Ramirez’s attempts to get the charge reversed were met with varying levels of resistance and silence, including, she said, a CareCube representative wrongly telling her she won’t get the money back because the CDC doesn’t recommend tests for vaccinated patients. It wasn’t until after she left a bad review online and sent an email threatening to tell the media about the incident that her charge was zeroed out. “I don’t want to pay this money to these folks,” she said. “They’re clearly scamming people, and they’re not very transparent about their pricing, or how they’re billing your insurance, or how they even work with your insurance company.”

Getting surprise medical bills is one of the many grim realities of the U.S. health-care system and one that was legal until recently. Three former CareCube employees say, however, that the company crossed the line by purposely lying to insurers and customers like Ramirez in order to charge them unnecessary payments. The employees, who requested anonymity out of fear of retribution, say CareCube management conspired to use complicated billing procedures to exploit little-known exemptions in federal law, which requires that most COVID tests be given free of cost to patients, and then charged both parties for the same test. They say customers and insurers complained of fraudulent billing practices and that upper management has been aware of the complaints, which go back more than a year. The allegations have quietly drawn attention from federal investigators, who have interviewed at least one former employee about the alleged scheme. The U.S. Attorney’s Office in Manhattan declined to comment, and neither CareCube nor any of its employees has been charged with a crime.

Health-care billing is a maddeningly complicated business even when everything is done correctly. At the core of it, a provider negotiates rates with insurers for a range of procedures, and those prices can vary widely depending on the insurer and how much leverage the provider has. When it comes to COVID treatment, things were supposed to be much simpler. In 2020, President Trump signed into law two bills that required insurance companies to pay all costs for COVID testing, with two exceptions: if people need to test to return to work or as part of a general virus-surveillance requirement, like international airline passengers. The majority of such tests costs insurers $149 or less, according to the Kaiser Family Foundation, but because rates are negotiated, prices can vary to wild extremes, with some testing regimens having cost as much as a year of tuition at a private university. While the amount of money brought in per test is typically small, the sheer volume of tests can be a boon.

So when the pandemic struck, businesses such as CareCube found themselves in the middle of an unexpected gold rush: All of a sudden, millions of people needed tests. CareCube got into the business last March and over the next nine months performed more than 72,000 tests, according to the state’s health department. CareCube multiplied from one location in Brooklyn three years ago to 20 locations throughout the city — and just about as quickly gained a reputation for surprise billing, as The City reported in August. That month, then–City Councilmember Brad Lander asked State Attorney General Letitia James to “thoroughly investigate CareCube’s practices to ensure that they cannot mislead the public.” (On January 6, the day after this story was originally published, James’s office announced that it was investigating CareCube for “wrongfully billing” patients.)

There is little public information about who owns CareCube, but public records and former employees say it’s run by a physician named Dr. Niranjan K. Mittal, a cardiologist educated in India and licensed to practice medicine in New York since 1985. A former clinical instructor at Mount Sinai, he opened his own practice in Bay Ridge. He has also been hit with lawsuits in state court that go back to at least 2008, accusing him of malpractice, stiffing employees out of their wages, and firing a woman for being pregnant — all claims he is still fighting, though he has previously paid $100,000 on summary judgment in another suit for unspecified damages and had a case for wrongful death dismissed with prejudice.

Under Mittal, former employees detailed a business driven by getting as much revenue and keeping expenses as low as possible. Employees accused CareCube in lawsuits and interviews of skimming their pay by denying them overtime. “I point blank was upset because I was working over 70 hours a week and was not paid overtime,” one former employee said in a declaration in a related discrimination suit. One former receptionist said she was pressured to swab patients but declined to do so since she had no medical training. And two ex-employees said Mittal would also pressure staff to perform other invasive, and lucrative, procedures, like peripheral angiograms, which typically require inserting a catheter into the groin to check for arterial blockages. They said patients were referred from several CareCube sites in the Bronx and Brooklyn to a related practice, CareCube Cardiology in Bay Ridge, and would bring in about $7,000 to $10,000 per procedure. “A lot of patients always complained, ‘I don’t want to do the procedure; the last time I had the procedure, my leg was still hurting. I don’t want to go back there anymore,’” another former employee said.

When it came to COVID testing, CareCube allegedly doubled its profits by taking advantage of loopholes in the law to charge both patients and insurers for the same test, with patients billed after insurers had paid CareCube. The former receptionist said she was required to send photos of patients’ insurance cards via Slack to a team in India that would send back a price to charge the patient. (Another employee who was aware of the practice said this was to save money, but it’s not clear why a receptionist wasn’t able to do this like at other medical offices.) Patients and insurers frequently raised on phone calls and in letters how tests were coded on official forms, employees said. While Ramirez’s forms were mislabeled for returning to work rather than for exposure, CareCube allegedly did the opposite in some cases, charging others up front and then submitting paperwork saying something different that would trigger a payout from insurance companies. “If the patient is exposed to COVID through someone they know, the insurance is responsible for paying,” one ex-employee said. “Even after the patient said that they were traveling, they will bill the insurance, but they also charged the patient.”

When patients complained, they were usually directed to a billing department that didn’t respond to queries. Another ex-employee said a separate team of ten in a call center would hear about 30 complaints a day about over- and double billing. (Medicare and Medicaid patients were never charged.) Three former employees told me the company’s management has been aware of the persistent double-billing complaints, with some going back over a year. “They know that this was a fraud. They knew it because they were getting letters from patients — and not only patients but also insurance,” one ex-employee said. “I remember opening up letters coming from the insurance stating that they were billing the insurance, but the patient had reached out to the insurance saying that they knew that they paid for a COVID test.”

CareCube has previously defended its billing practices by saying that patients are not being charged for tests but rather being charged for doctor’s visits, which it says are medically necessary for determining the reason for a test. (The Biden administration updated guidance last year that would prevent doctors from doing that.) On the company’s website, a chatbot said “plans and issuers are not required to provide coverage of testing such as for public health surveillance or employment purposes” and that rates for tests can vary from $200 to $225 each. A woman who answered the phone at the Bay Ridge office declined to make Mittal available for an interview and demanded that I pass along questions to her when I identified myself as a reporter. “How would you like somebody writing a story about you?” she asked. A lawyer for Mittal didn’t return requests for comment.

This past summer, law enforcement had started to look into CareCube’s practices. FBI agents went to one former employee’s house and asked about Mittal as well as two other administrators, according to text messages reviewed by Intelligencer. “I am aware that the U.S. Attorney’s office in the Southern District of New York is conducting some kind of investigation,” Joel Glaser, an attorney for a man who is suing Mittal for malpractice unrelated to COVID testing, told Intelligencer. “They’ve been calling around to various individuals who have claims against Dr. Mittal, myself included.”

It’s unclear if the Justice Department is still investigating Mittal or CareCube. However, the company’s billing practices appear to be ongoing. After The City published its report about CareCube’s billing practices, the company temporarily stopped double billing patients, another ex-employee said, but soon started back up again: “They were saying, ‘Okay, no matter the insurance, all of that is going to be fully covered by insurance.’ But that was just for two weeks. After two weeks, I guess they thought that everything was calmed down. They started to charge again.”

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CareCube Is Accused of Running a COVID-Testing Scam