Payor Relations Insider: The Introduction of Turnaround Time Requirements for SARS–CoV–2 Testing

To ensure COVID testing is performed in as timely a manner as possible, CMS created a turnaround time-dependent reimbursement policy. Since its introduction in January 2021, many other payors have also adopted this pricing schema.

The COVID-19 Public Health Emergency has created new burdens for clinical diagnostic laboratories. The results of these SARS-CoV-2 tests are used for critical treatment ¾ including to diagnose and quarantine suspected COVID-19 patients ¾ and therefore it is vitally important that the tests are performed within a timeframe that supports clinical benefits. Thus, the add-on incentive for quick turn around on high throughput technologies.

On January 1, the Centers for Medicare and Medicaid Services (CMS) announced a new Ruling (CMS Ruling 2020-1-R). This Ruling amends CMS’s policy on the payment of certain clinical diagnostic laboratory tests (CDLTs) related to COVID-19 in Medicare Part B. The Ruling establishes a payment amount of $75 per test for CDLTs designed to detect SARS-CoV-2 or diagnose the virus that causes COVID-19 for laboratories using high throughput technologies. Tests to detect SARS-CoV-2 or diagnose the virus that causes COVID-19 are identified by Healthcare Common Procedure Coding System (HCPCS) codes U0003 and U0004.

The CMS Ruling also establishes an add-on payment of $25, which may be billed with either HCPCS code U0003 or HCPCS code U0004 when the test is completed within two calendar days of the specimen being collected and administered during the ongoing public health emergency period. This add-on is identified as HCPCS code U0005. Under the Medicare Ruling, providers are responsible for determining eligibility to bill for the add-on payment, which is subject to audit. In the event of an audit or medical review, labs will need to produce documentation to support the add-on payment, even if the documentation would not be required under standard Medicare regulations.

The Ruling also identifies examples of high throughput technology. For the specifics of this Ruling, see the CMS policy here.

Since this Ruling, many payors have adopted this policy of reimbursing $75 per test with an available add-on should results be returned in two calendar days or less. Examples of payors that have adopted this policy since it was introduced include:

• Aetna
• Cigna
• Humana
• United Healthcare
• Blue Cross Blue Shield (BCBS) of HA, ID, IL, MA, MN, MS, MT, NE, NJ (Horizon Blue), NC, OK, OR, TX, UT
• State Medicaid programs for CO, CT, ID, IL, IN, IO, KS, KY, ME, MN, MO, MT, NE, NV, NJ, NM, NY, NC, OH, OK, OR, TX, VT, VA, WA, WV, WY

The COVID-19 Public Health Emergency has created new burdens for clinical diagnostic laboratories. The results of these SARS-CoV-2 tests are used for critical treatment ¾ including to diagnose and quarantine suspected COVID-19 patients ¾ and therefore it is vitally important that the tests are performed within a timeframe that supports clinical benefits. Thus, the add-on incentive for quick turn around on high throughput technologies.

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