November 13, 2020 | By Bryan Meek, Esq., Brennan, Manna, and Diamond
As the COVID-19 pandemic continues to wreak havoc globally, routine COVID-19 testing of employees, patients, and the general population have become more common. However, issues regarding coverage for this testing are starting to emerge. In recent weeks, major payers and insurers have started auditing the medical necessity of COVID-19 tests, and they have ramped up record demands to both treating providers and laboratories. Therefore, it is imperative that all healthcare providers understand the medical necessity requirements when ordering COVID-19 testing. As always, to the extent medical necessity is not met, individuals and/or employers will be on the hook for payment. It is important to remember that if tests are ordered and billed that are not medically necessary, payers and insurers can recoup such payments via future audit and demand.
Insurance Coverage for COVID-19 Testing under the FFCRA
Passed on March 18, 2020, the Families First Coronavirus Response Act (“FFCRA”) requires group health plans and health insurance issuers (“plans and issuers”) to provide benefits for certain items and services related to COVID-19, including the diagnostic testing and/or the diagnosis of COVID-19 and treatment for the same. Under the FFCRA, plans and issuers must provide coverage without imposing any cost-sharing requirements or prior authorization. See Pub. L. No. 116-127 (2020). The FFCRA was subsequently expanded via the passage of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Shortly after the passage of this legislation, many providers, working alongside laboratories, rushed to provide the diagnostic testing and treatment necessary to reduce the spread of COVID-19. However, payers quickly realized that many tests for COVID-19 were being ordered without documentation of medical necessity, and the legislation, as originally written, did not require that medical necessity be demonstrated.
Therefore, clarification in the form of joint regulatory guidance from the Department of Labor (“DOL”), the Department of Health and Human Services (“HHS”), and the Department of Treasury (“Treasury”) was soon issued. This guidance stated that diagnostic COVID-19 testing must be covered by plans and issuers without patient cost-sharing when medically appropriate for the patient, as determined by their attending healthcare provider, in accordance with accepted standards of current medical practice. The effect of this guidance is that providers must demonstrate medical necessity for a COVID-19 diagnostic test, and document it in the medical record, for the no cost-sharing benefit to apply.
All plans and issuers are now following this guidance and require healthcare providers meet medical necessity by documenting that the patient is experiencing signs or symptoms of COVID-19, as determined by the CDC. However, patients who are asymptomatic may also qualify for a medically necessary COVID-19 test if they have a known or suspected recent exposure to COVID-19, which is defined by CDC guidelines regarding exposure.
Coverage for Routine Testing Programs/Polices
Given these medical necessity requirements, many employers questioned the coverage for routine diagnostic testing of employees and business patrons pursuant to testing protocol. In furtherance of these questions, the DOL, HHS, and Treasury supplied updated regulatory guidance and FAQs on FFCRA and CARES Act implementation. When asked “is COVID-19 testing for surveillance or employment purposes required to be covered under FFCRA/CARES,” the agencies responded:
“No. Section 6001 of the FFCRA requires coverage of items and services only for diagnostic purposes as outlined in this guidance…[T]esting conducted to screen for general workplace health and safety (such as employee ‘return to work’ programs), for public health surveillance for [COVID-19], or for any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition is beyond the scope of section 6001 of the FFCRA.”
This means that insurance plans and issuers may deny coverage of COVID-19 testing when the testing is performed only for surveillance or pursuant to a routine, blanket testing policy for all employees.
Based on the foregoing, plans and insurers are conducting routine audits and reviews to ensure that COVID-19 testing is only being covered for payment when there is documented medical necessity for such testing. In addition, if testing is being conducted in accordance with an employer’s routine testing protocol, instead of documented medical necessity, this testing is unlikely to be covered by the plans and insurers. Instead, these employers will be responsible to cover the cost of this routine surveillance testing.
Payment Rates for COVID-19 Testing Coverage Under the CARES Act
Payment for COVID-19 testing is also determined under provisions in the CARES Act. Plans and issuers are required to reimburse a provider for such testing at one of the following rates: (1) if the plan or issuer had a negotiated rate with the provider prior to the public health emergency, then at that negotiated rate; (2) if the plan or issuer did not have a negotiated rate with the provider, then at an amount equal to the cash price for such service as listed by the provider on a public website; or (3) a newly negotiated rate between the plan/issuer and provider.
State Law
Please be advised that nothing in FFCRA or the CARES Act prevents a state from imposing additional standards or requirements on health insurance issuers or providers with respect to the diagnosis, treatment, or coverage of COVID-19. As such, it is imperative to consult state law to determine if there are any other coverage determinations or limitations with respect to COVID-19 testing reimbursement.
If you need additional assistance regarding insurance coverage, laboratory billing or the FFCRA, please do not hesitate to contact Bryan E. Meek, Esq. (330-253-5586 or bmeek@bmdllc.com), who is an attorney in Brennan, Manna & Diamond’s Provider Relations, Audits, and Appeals Unit, a division of BMD’s Healthcare Department.
