As part of the ongoing effort to improve access to COVID-19 diagnostic
testing, the Centers for Medicare & Medicaid Services (CMS) issued
guidance outlining the requirement that private health insurers and
employer group health plans cover testing and related services without cost
to their respective beneficiaries. In addition, CMS announced that it
increased the reimbursement rate for certain COVID-19 lab tests.
Since the outbreak of COVID-19, CMS has announced several such changes,
waivers intended to expand the pool of available healthcare providers and
updates to previously issued quality reporting exceptions.
Private Insurers Required to Cover Testing Without Cost-Sharing
to health plans on April 11, 2020, in conjunction with the Departments of
Labor and the Treasury, addressing key questions about Section 6001 of the
Families First Coronavirus Response Act (FFCRA) and Sections 3201 and 3202
of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
According to this guidance, the FFCRA requires that group health plans and
commercial insurance companies offering individual or group coverage
provide coverage for certain items and services related to COVID-19
diagnostic testing provided on or after March 18, 2020, through the
duration of the public health crisis. This coverage must be provided
without patient cost-sharing, prior authorization or other medical
management requirements, making the services more accessible at no cost to
patients. The CARES Act amended Section 6001 of the FFCRA to broaden the
range of items and services subject to the FFCRA’s requirements to include
- that have been approved by the FDA;
- for which the developer has requested, or intends to request, emergency
- developed in and authorized by a state that has notified the secretary of
the Department of Health and Human Services (HHS) of its intent to review
COVID-19 diagnostic tests; and
- any other tests that the secretary of HHS determines appropriate.
CMS clarifies in its guidance that these requirements apply to COVID-19
antibody testing that, in addition to its use in diagnosing the disease,
may help determine whether a patient has previously been infected with the
virus that causes it. Antibody testing, once it becomes widely available,
could play a key role in accurately measuring the reach of the COVID-19
In addition, the CARES Act requires that private insurance companies
covering these items and services reimburse a provider at either the
negotiated plan rate or the appropriate cash price if the insurer does not
have a negotiated rate with that provider. These requirements are part of a
larger effort “to remove financial barriers for Americans to receive
necessary COVID-19 tests and health services, as well as encourage the use
of antibody testing that may help to enable health care workers and other
Americans to get back to work more quickly,” said CMS Administrator Seema
Medicare Increases Reimbursement Rate for High-Throughput COVID-19 Lab
Building on its other efforts to increase access to testing, CMS
on April 15 that it will increase Medicare reimbursement for clinical
laboratories using high-throughput technologies to test for COVID-19.
Effective for tests administered on or after March 18, 2020, Medicare will
now pay laboratories $100 per such diagnostic test, almost double the
The ruling issued by CMS defines a high-throughput technology as using “a
platform that employs automated processing of more than two hundred
specimens a day,” citing the need for sophisticated equipment and
additional technical training as warranting this increase in reimbursement.
This increase builds on prior CMS changes meant to expand COVID-19 testing,
including allowing hospitals, laboratories and other entities to test
patients who are homebound or living in other community-based settings and
receive new specimen collection fees for such patients. Laboratories may
invest more heavily in high-throughput technologies as a result of this
reimbursement increase, which could lead to more widespread rapid testing.
This increase in reimbursement does not apply to other forms of COVID-19
testing or any other diagnostic tests, which will still be reimbursed at
existing rates. Medicare Administrative Contractors are directed to take
necessary measures to implement this ruling in their respective
jurisdictions but may still independently determine the payment amount for
other forms of COVID-19 testing.
Information on the breadth of the COVID-19 pandemic’s impact will be
crucial in determining the appropriate response to the disease, and the
availability of such information depends on readily accessible,
comprehensive and rapid testing. The requirement that health plans cover
COVID-19 diagnostic testing, including antibody testing, without cost to
patients, and the increase in reimbursement to laboratories using
high-throughput technologies are the latest in a series of steps toward
improving the availability of this critical information.
McGuireWoods will continue to monitor any additional CMS developments and
guidance related to reimbursement and other requirements for health plans
and other payors. Please contact the authors for more information regarding
regulatory responses to the COVID-19 pandemic. McGuireWoods has published additional thought leadership related to how companies across various
industries can address crucial coronavirus-related business and legal
issues, and the firm’s
COVID-19 Response Team
stands ready to help clients navigate urgent and evolving legal and
business issues arising from the novel coronavirus pandemic.
In a series of video alerts, McGuireWoods’ healthcare lawyers address
issues providers face and overcoming COVID-19 challenges.