CARES Act: Diagnostic Testing and Laboratory-Related Provisions

March 26, 2020 | Geoffrey R. Kaiser | COVID-19 | FDA | Legislation and Public Policy | Medicare and Medicaid | Private Insurers

Several of the provisions in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed by the Senate on March 25 relate to laboratory diagnostic testing for the COVID-19 virus.

Within Division A of the CARES Act, titled “Keeping Workers Paid and Employed, Health Care System Enhancements, and Economic Stabilization,” there are four sections that address insurance coverage for diagnostic testing (§ 3201), pricing of diagnostic testing (§ 3202), coverage for diagnostic testing products (§ 3717), and clinical laboratory reporting (§ 3718):

  • Section 3201 (Coverage of Diagnostic Testing for COVID-19) provides that health plans must cover an in vitro diagnostic test and the administration of such a test, for the detection of COVID-19, without any cost sharing (including deductibles, copayments, and coinsurance) requirements or prior authorization or other medical management requirements, where (a) the test is approved, cleared or authorized by the FDA; (b) the test developer has requested emergency use authorization or fails to do so within a reasonable time; or (c) the test is developed in and authorized by a State that has notified the Department of Health and Human Services (HHS) of its intention to review tests intended to diagnose COVID-19.
  • Section 3202 (Pricing of Diagnostic Testing) provides that the provider of diagnostic testing for COVID-19 will be reimbursed at the rate negotiated with the insurer if the rate was negotiated before the public health emergency was declared or, if there is no negotiated rate, reimbursement shall be in an amount that equals the cash price for the service as listed by the provider on a public internet website, or the insurer may negotiate a rate with the provider for less than such cash price. During the period of the public health emergency, each provider of a COVID-19 test must make public its cash price for the test on a public internet website. The Secretary of HHS is authorized to impose a civil monetary penalty on any provider of such a test that is not in compliance and that has not completed a corrective action plan to comply, in an amount not to exceed $300 for each day of the violation.
  • Section 3717 (Clarification Regarding Coverage of COVID-19 Testing Products) amended other emergency COVID-19 legislation in order to broaden coverage under Medicaid for such COVID-19 testing and remove the limitation that such testing must be approved by the FDA.
  • Section 3718 (Reporting Requirements Relating to Clinical Diagnostic Laboratory Tests) provides for longer deadlines related to mandatory reporting by clinical laboratories of private payment rates for diagnostic tests that are used by the Centers for Medicare & Medicaid Services to determine Medicare reimbursement rates for such tests, as set forth in 42 U.S.C. § 1395m-1.

Finally, in Division B of the CARES Act, titled “Emergency Appropriations for Coronavirus Health Response and Agency Operations,” there is a provision requiring that clinical laboratories performing or analyzing a test that is intended to detect COVID-19 or to diagnose a possible case of COVID-19 report the results from each such test to HHS as prescribed by the HHS Secretary, until the end of the public health emergency declaration, or any extension of such declaration. The Secretary is authorized to prescribe which labs are subject to the reporting requirements, may establish the reporting requirements by regulation (including by interim final rule or guidance), and may do so without regard for the requirements otherwise made applicable by the Administrative Procedure Act.

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