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COVID testing company in Nevada missed nearly all cases, ProPublica reports

Associated Press

Originally aired: May 23, 2022

We may never know exactly how many people in Nevada have truly contracted COVID-19. That’s partly because thousands of people in Northern Nevada were told they tested negative for the virus despite being sick.

A recent story from ProPublica takes a deep dive into how a Chicago company with operators who had no public health experience — one of whom had served time in prison for fraud — became the go-to covid testing company for Washoe County and other communities.

They also had testing sites in Henderson and Las Vegas.

Despite the fact that some county health officials saw early red flags and tried to end contracts with the company, time and again, influential people, including a former state department chief, intervened.

That kind of influence seemed to be enough to keep the company around.

Anjeanette Damon, a reporter for ProPublica and a former reporter for the Las Vegas Sun and Reno Gazette Journal, wrote the story.

Last fall, the delta variant was starting to wane, and public health agencies were looking for ways to increase testing capacity, she said. OSHA had passed a rule for testing in place of vaccination, and colleges were trying to return to campus.

Northshore Clinical Labs “walked into Nevada,” amid the demand.

“One of the business development employees there at Northshore was friends with two gentlemen in Nevada, Greg and Angelo Palivos, their father, Peter Palivos, was good friends with Governor Sisolak. And Northshore Clinical contracted with the Palivos brothers to develop clientele in Nevada, and help the company get licensed and basically create some business for them in Nevada,” Damon said.

The individuals who appear to run the company, according to public documents and new releases from Chicago, do not have public health experience, or much experience in any medical field, but were each involved in debt collection companies accused by the FTC of being involved in a scam.

Once the company moved into Northern Nevada, “you had very public chaos” at the test sites, with long lines, traffic and confusing results. A TV station reported accusations by an employee of unsafe working conditions.

“I saw that kind of chaos unfolding and I thought, ‘Who is this company? And why do they have contracts with Washoe County with the Washoe County School District with the University of Nevada Reno?’ she said. “I would later learn that the City of Las Vegas also contracted with them, and that they provided testing from a recreation center in the City of Henderson.”

Within hundreds of documents and public records requests, she discovered a 96% false negative rate on the tests.

Northshore would run two tests, a rapid antigen test with results in 15 minutes and a PCR test that would be sent to Chicago for the results within 48 hours. Many people would get positive rapid tests and have symptoms, then test negative on the more-reliable PCR test. Due to the negative result, they would go back into the community while sick with COVID-19.

The trend was noticeable, and eventually the samples were double tested at the state lab. ”96% of the positives found by the public health lab were missed by Northshore so Northshore was giving people negative PCR results when they actually had had COVID,” Damon said.

Northshore, which operated in 20 states, declined to comment on the story. It’s unknown what the issue was in Chicago regarding the PCR tests.

“Governments were under tremendous pressure to try and increase the supply of testing. And during periods of emergency, kind of the normal government procurement rules have a competitive process, and long vetting processes are suspended because you need to be nimble in order to meet the needs of people during an emergency,” she said. “We were almost at that point, two years into a pandemic, that it was time to kind of figure out how to provide testing.”

In a follow-up last week, The Nevada Independent reported Sisolak called the company’s actions “despicable,” and that an investigation has been opened.

Anjeanette Damon, reporter, ProPublica

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Paul serves as KNPR's producer and reporter in Northern Nevada. Based in Reno, Paul specializes in covering state government and the legislature.