Recent Changes for Medicare and Commercial Insurers to Improve Access to COVID-19 Testing

April 27, 2020

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, including 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

CMS issued guidance 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 diagnostic tests:

  • that have been approved by the FDA;
  • for which the developer has requested, or intends to request, emergency use authorization;
  • 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 pandemic.

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 Verma.

Medicare Increases Reimbursement Rate for High-Throughput COVID-19 Lab Testing

Building on its other efforts to increase access to testing, CMS announced 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 previous rate.

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.

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