By STEPHEN SHAVER
In an effort to increase the availability of COVID-19 testing and decrease the cost of testing to individual consumers, Congress required group health plans and commercial health insurers to provide coverage for COVID-19 testing with no cost-sharing, prior authorization, or other medical management requirements. However, months of ambiguous guidance have opened the door for inconsistent implementation and left providers, especially the clinical laboratories doing the testing, in a precarious position.
Congress’s efforts began with the Families First Coronavirus Relief Act (FFRCA), enacted on March 18, 2020. The FFCRA required group health plans and commercial insurers to provide coverage of FDA-approved tests “for the detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19,” as well as items and services relating to a visit that results in such a test, at no cost to the beneficiary. Congress built on this requirement in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020. The CARES Act expanded the types of approved tests that were covered by the FFCRA and set the reimbursement rate for COVID-19 testing by out-of-network laboratories. Under the CARES Act, an insurer must reimburse an in-network laboratory at the negotiated rate that existed before the public health emergency and reimburse an out-of-network laboratory at the “cash price” listed on the laboratory’s website. Laboratories must publicly post their “cash price” or face civil monetary penalties (CMPs).
In June 2020, three federal agencies, Department of Health and Human Services, Department of Transportation, and Department of Labor, released guidance that created several points of confusion regarding these requirements. First, the guidance required that an attending provider make an “individualized clinical assessment” that testing was medically appropriate before insurers were required to cover testing. This added requirement arguably gave insurers the ability to deny coverage for several categories of testing: testing in states with blanket orders allowing testing without a physician order, testing of asymptomatic individuals, and testing for employment, travel, or screening purposes. Second, despite the FFCRA’s mandate that insurers cover items and services for visits that result in a COVID-19 test, the June 2020 guidance limited coverage to the testing itself and excluded from coverage “any other items and services.”
The ambiguity of the June 2020 guidance led to inconsistent coverage and reimbursement of COVID-19 testing across insurance payors and occasionally within the same payor. This created an especially difficult environment for out-of-network laboratories, who were required to post a “cash price” that complies with any local price-gouging and consumer protection measures, while knowing that insurers may deny claims or may pay only a portion.
After several members of Congress and industry personnel separately asked the agencies to revisit and clarify the June 2020 guidance, the Centers for Medicare & Medicaid Service did so in February 2021. This guidance answered some questions but created others. First, the February 2021 guidance rendered moot the requirement that an attending provider make an “individualized clinical assessment” that testing was medically appropriate. Pursuant to the guidance, wherever an individual seeks a test or a provider refers an individual for a test, the insurer “must assume” that the test reflects an individualized clinical assessment and cover the test. CMS also specifically articulated that insurers may not require the presence of symptoms, recent exposure to the virus, or other medical screening criteria on the coverage of tests. However, insurers are not required to cover testing for public health surveillance or employment purposes. CMS noted there is also no prohibition of insurers providing coverage for such tests.
CMS also attempted to address issues it saw in the area of laboratories posting their “cash price,” namely laboratories not posting their cash price or posting an extraordinarily high price, which the law would presumably require insurers to pay. CMS presented two responses by insurers: report cash price posting violations to CMS and “encourage” plan enrollees to rely on in-network laboratories or other laboratories that follow best practices. However, depending on the form and arrangements at issue, this “encouragement” of enrollees to use certain laboratories to provide COVID testing services may create implications of the Anti-Kickback Statute and the Eliminating Kickbacks in Recovery Act (EKRA), both of which prohibit payment in exchange for referrals for clinical laboratory services.
The clarifications regarding coverage of COVID-19 testing found in the February 2021 guidance will likely begin to resolve the issues created by the June 2020 guidance. Consistent coverage requirements and consistent reimbursement will almost certainly benefit insurers and clinical laboratories, respectively. While several issues remain, the contours of this program are slowly coming into focus.