Medicare to Cut Payment for COVID-19 Testing That Takes More Than Two Days

Beginning January 21, 2021, only COVID-19 diagnostic tests that are completed within two days will be paid at the current rate by Medicare. Since the outbreak of the COVID-19 pandemic, diagnostic testing has been an important part of strategies to combat the virus. In an early push to expand COVID-19 diagnostic testing capacity, on April 15, 2020, the Centers for Medicare & Medicaid Services (“CMS”) announced that Medicare would increase the payment to laboratories for high-throughput COVID-19 diagnostic tests from approximately $51 to $100 per test.

However, on October 15, 2020, CMS announced a change to this policy. Beginning January 1, 2021, COVID-19 diagnostic tests run on high-throughput technology will be paid at a base rate of $75 per test. A $25 per test add-on payment will then be paid to laboratories for a high throughput COVID-19 diagnostic test if the laboratory: (1) completes the test in two calendar days or less, and (2) completed the majority of all the previous months’ high-throughput COVID-19 diagnostic tests in two calendar days or less. The second requirement includes all of a laboratory’s high-throughput COVID-19 diagnostic tests in the precious month, not just those that are billed to Medicare. Thus, only tests that meet both these requirements will continue to be paid at $100 per test, while others will be paid at $75 per test. CMS indicates that this change is intended to support faster testing and also reflect the resource costs laboratories face to complete testing in a timely fashion.

In the event of an audit, CMS indicates that a laboratory that received the $25 per test add-on would be required to produce documentation of timeliness based on their performance in the month preceding the date of the test. These increased documentation requirements could effectively begin as early as December 2020. Because the new payment rates become effective January 1, 2021 but take into account tests completed in the previous month, laboratories will likely have to complete the majority of their tests run in December 2020 in two days or less to qualify for the add-on payment in January 2021.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in Medicare policies. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.