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Myndshft Blog

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March 17, 2020

How Will COVID-19 Testing Be Reimbursed?

by Patrick | Healthcare Administration

The US finds itself woefully unprepared to perform enough COVID-19 testing to identify and quarantine infected patients at scale, slowed by test development regulations; a disbanded White House pandemic response team; and a lack of coordination between local, state and federal governments.

This lack of “systemness” in the healthcare system has left clinical laboratories scrambling to receive testing approval from the Centers for Disease Control (CDC) and ramp up production.

Fortunately, testing guidelines were loosened by the Federal Drug Administration (FDA) at the end of February, allowing academic labs and large commercial labs like Quest Diagnostics and LabCorp to quickly ramp up test kit production, soon to be followed by smaller diagnostics labs.  

How Will COVID-19 Testing and Care Be Reimbursed?

The extraordinary nature of the COVID-19 pandemic has left payers and the larger reimbursement ecosystem scrambling too. How will testing be reimbursed? What stipulations will be made for vulnerable populations without the means to cover testing and treatment? 

These types of questions clearly weigh heavily on patients too, with a recent survey conducted by YouGov indicating that 48% are not confident in their ability to meet costs of care associated with COVID-19, with 40% indicating that they would need to rely on bank loans, credit card debt or borrowed money from family members to cover any medical treatment they may need.

Fortunately, reimbursement issues have become clearer over the past 10 days. 

    • The Centers for Medicare & Medicaid Services (CMS) have emailed providers with pricing for COVID-19 diagnostic tests. Laboratories testing patients using the CDC’s test will receive just under $36 in Medicare reimbursement; non-CDC test kits will receive approximately $51.
    • CMS also announced new Healthcare Common Procedure Coding System (HCPCS) codes specific to COVID-19. Code U0001 will be applied to diagnostic testing performed by labs using CDC-developed tests, and code U0002 can be applied to all non-CDC laboratory tests for COVID-19. Medicare will begin to accept these codes for payment beginning April 1 for dates of service on or after Feb. 4.
    • The American Medical Association Current Procedural Terminology (CPT) Editorial Panel has also introduced CPT code 87635 that addresses COVID-19.
    • Congress passed the Coronavirus Preparedness and Response Supplemental Appropriations Act intended to enable physicians and other clinicians to bill Medicare fee-for-service for telehealth services provided during the current coronavirus pandemic.
    • Some large payers have indicated that they will cover COVID-19 testing without requiring any patient out-of-pocket costs. Blue Cross of California announced that it is waiving out-of-pocket costs for its members to access care through telemedicine provider, Teladoc. Aetna also announced that its members covered under CVS Health will have access to telemedicine visits with no copay for the next 90 days.
    • House Democrats have proposed free COVID-19 testing including for the uninsured, and for establishing paid sick and family leave, supplemental unemployment insurance, and expanded food security programs, as well as new regulations to protect healthcare workers.

We will continue to monitor the COVID-19 reimbursement environment and update this blog post as more information is released.