CMS Issues Updated Guidance on Medicare Flexibility Measures for Laboratories

May 6, 2020

This alert is part of a series discussing the comprehensive actions CMS is taking in response to the COVID-19 pandemic that are most important to healthcare providers. For related alerts, see “New Updates: CMS Provides Flexibility for Medicare Advantage, Part D Plans Amid COVID-19” (April 6; updated May 6), “CMS Updates Guidance on Medicare Flexibility Measures for Long-Term Care Facilities” (May 7), “CMS Continues to Increase Flexibility in Quality Reporting Requirements” (May 8) and “COVID-19 – New Regulatory Flexibilities for Durable Medical Equipment Suppliers” (May 13).

In response to the extraordinary circumstances of the 2019 novel coronavirus (COVID-19) pandemic, on March 30, 2020, the Centers for Medicare & Medicaid Services (CMS) announced multiple temporary regulatory waivers and new rules to provide temporary relief from certain requirements. CMS’ goal was to allow providers to focus on providing care to patients affected by COVID-19. On April 30, 2020, CMS issued updated temporary regulatory waivers and another round of regulatory changes in a new interim final rule with comment period (IFC).

This article focuses on updates to Medicare reimbursement and administration, as well as certain key regulatory changes, for laboratories and COVID-19 diagnostic testing.

Medicare Reimbursement for COVID-19 Diagnostic Testing

As discussed in a previous article, the information provided by comprehensive and rapid diagnostic testing will play a key role in the nation’s response to the COVID-19 crisis, and this new IFC includes several changes to Medicare reimbursement aimed squarely at improving access to such testing.

Medicare will now pay for specimen collection and related travel expenses when laboratories send trained technicians to collect specimens from homebound or non-hospital inpatient beneficiaries. Specimens for diagnostic testing may also be collected by a home health nurse or Rural Health Clinic/Federally Qualified Health Center visiting nurse during an otherwise covered visit. In addition, physicians and hospital outpatient departments can be paid for symptom assessment and specimen collection for diagnostic testing, which will aid providers in operating testing sites during the pandemic. Finally, Medicare will cover diagnostic testing performed by pharmacists as part of a Medicare-enrolled laboratory, and pharmacists may perform basic services, such as specimen collection, when under contract with a practitioner and within their scope of practice.

During the COVID-19 public health emergency, Medicare will not require an order from a treating physician or other provider as a condition of Medicare reimbursement for COVID-19 and related diagnostic testing. Of note, diagnostic testing for this purpose includes FDA-authorized COVID-19 serology, or antibody, testing, which may help identify patients who have had COVID-19 and developed an immune response.

Regulatory Flexibility

This new IFC also includes guidance on regulatory flexibility and waivers under the Clinical Laboratory Improvement Act and the Stark Law. During the COVID-19 pandemic, CMS is exercising enforcement discretion to allow pathologists to review specimens remotely, without the need for a separate CLIA certificate for the remote location. CMS will also expedite the review process for CLIA certificate applications and allow laboratories within a hospital or university hospital campus to hold a single certificate for all laboratory sites within the same physical location or at the same street address. Finally, CMS’ guidance clarifies that alternate collection devices and media may be used to collect and transport COVID-19 samples, provided that the laboratory follows the manufacturer’s instructions in using devices and media. If the laboratory modifies the manufacturer’s instructions, it is the responsibility of the laboratory director to define validation parameters to be used in evaluating the modified test method for its fitness as a COVID-19 test.

Under the Stark Law waivers issued March 30, 2020, and discussed in more detail in a prior article, CMS will permit certain referrals and financial relationships that would otherwise violate the Stark Law if those referrals and relationships are solely related to a COVID-19 purpose. For example, hospitals and other providers may pay below fair market value for a physician’s services, for equipment rental and for the purchase of certain items or services. Hospitals may provide certain items and services to facilitate providers’ patient care, including daily meals and laundry and childcare services, and other providers like home health agencies may provide items and services, like COVID-19-related continuing education, that would otherwise exceed Stark Law’s annual cap on non-monetary compensation. Some of the outlined waivers directly improve access to care for patients, such as allowing physician-owned hospitals to temporarily increase their number of beds to accommodate patient surge or allowing group practices to furnish medically necessary imaging and laboratory services from mobile locations that they rent on a part-time basis.

Administrative Changes

Finally, CMS made several updates to the Medicare appeals process and related program administration. As part of its response to the coronavirus, CMS is empowering Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) to allow various administrative flexibilities, depending on the Medicare program in question. For example, MACs and QICs in the fee-for-service program are now permitted to allow extensions to file appeals, waive timeliness requirements for requests for additional information in adjudicating appeals, process appeals with incomplete Appointment of Representation forms, and process requests for appeals that fail to meet required elements by using information that is available. Many of the same flexibilities are also available for MACs and QICs in Medicare Advantage and Part D programs, as well as Part C and Part D Independent Review Entities. Unlike the other entities, Medicare Advantage plans are specifically permitted to extend the time frame for adjudicating organization determinations and medical items and services (except Part B drugs) by up to 14 days under certain circumstances.

In addition, CMS established certain enrollment flexibilities for providers, including the waiver of certain screening requirements, postponement of all revalidation actions and expedited processing for pending and new applications from providers. CMS also reminded providers of the suspension of the Accelerated and Advance Payment Programs, effective April 26, 2020. Discussed in more detail in a previous article, CMS has suspended its Advance Payment Program and is re-evaluating all pending and new applications for the Accelerated Payment Program in light of funds available through the Department of Health and Human Services’ Provider Relief Fund. Unlike funds made available through the Advance and Accelerated Payment Programs, distributions made through the Provider Relief Fund do not need to be repaid.

The changes in the IFC are applicable beginning March 1, 2020, or January 27, 2020, except for specific rule changes. CMS will accept comments for 60 days after the IFC is published in the Federal Register. McGuireWoods will continue to monitor the progress of COVID-19-related regulatory changes, including those with respect to laboratories and diagnostic testing, as CMS considers the received comments.

Please contact the authors for additional information on the waivers and rule changes. McGuireWoods has published additional thought leadership on how companies across various industries can address crucial coronavirus-related business and legal issues. The firm’s COVID-19 Response Team stands ready to help clients navigate urgent and evolving legal and business issues arising from the COVID-19 pandemic.