CMS Payment Increase for Rapid-Result COVID-19 Testing

The Centers for Medicare and Medicaid Services (CMS) announced a nearly double per-unit payment increase for newly developed rapid-result COVID-19 lab tests in a press release on April 15, 2020. CMS Administrator Seema Verma noted “CMS has made a critical move to ensure adequate reimbursement for advanced technology that can process a large volume of COVID-19 tests rapidly and accurately. This is an absolute game-changer for nursing homes, where risk of Coronavirus infection is high among our most vulnerable.”

The amount Medicare will pay for the tests is $100 each; up from $51 each. These clinical diagnostic lab tests (CDLT) utilize high-throughput technologies that allow for increased testing capacity, faster results, and a more effective means to combat virus spread. It has been reported that these machines can produce results in as little as 5 minutes, and can process more than 200 specimens per day. The increased payment amount accounts for the specially trained personnel and intensive processes to assure quality in the results.

CDLTs are Medicare Part B items and services that are paid under the Clinical Laboratory Fee Schedule with generally no beneficiary cost sharing. CMS announced the following codes to identify these tests:

  • U0003: Infectious agent detection by nucleic acid (DNA or RNA). Severe acute respiratory syndrome Coronavirus 2 (SARS-CoV-2)(Coronavirus disease (COVID-19)), amplified probe technique, making use of high throughput technologies
  • U0004: 2019-nCoV Coronavirus, SARS-CoV-2/2019-nCoV (COVID-19), any technique, multiple types or subtypes (includes all targets), non-CDC, making use of high throughput technologies
  • U0003 identifies tests that otherwise would be identified with CPT code 87635, but are being performed with high throughput technologies
  • U0004 identifies tests that otherwise would be identified with U0002, but are being performed with high throughput technologies

This payment increase affects high throughput testing performed for the detection of the virus that causes COVID-19. Payment for all other CDLTs remains at the current level.

CMS reported in the April 15, 2020 press release, “This will both increase access to testing and reduce risks of exposure.” In late March 2020, CMS announced that hospitals and laboratories can perform COVID-19 tests on people at home and in community-based settings, and CMS will make payment for specimen collection fees for COVID-19 testing performed in settings other than the hospital. These increased Medicare payments should result in expanded capabilities to test vulnerable populations like homebound and nursing home patients, and provide faster results.

Resources:

CMS Ruling No. CMS-2020-01-R (April 14, 2020): CMS Policy Concerning the Designation and Payment of Certain Clinical Diagnostic Laboratory Tests Related to COVID-19 under the Medicare Part B Clinical Laboratory Fee Schedule

FOR MORE INFORMATION, PLEASE CONTACT THE FOLLOWING:

Eric Wetherell, CPA:  Principal and Healthcare Advisory Group Leader
Dianne Rodrigue, PA, MHP, CCDS, CRC, CPC:  Senior Manager, Healthcare Advisory Group

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