Labs planning to perform regular surveillance testing should understand that commercial payors and CMS are not necessarily required to cover it.
While the recent Feb. 26 Executive Order from President Biden stipulated all COVID-19 tests performed for individual diagnosis must be covered by payors without cost-sharing, surveillance testing, unfortunately, falls into a gray area that can sometimes necessitate establishing client-bill arrangements.
According to the Feb. 26 FAQs About Family First Coronavirus Response Act (FFCRA) and CARES Act, “…plans and issuers are not required to provide coverage of testing such as for public health surveillance or employment purposes. But there is also no prohibition or limitation on plans and issuers providing coverage for such tests. Plans and issuers are encouraged to ensure communications about the circumstances in which testing is covered are clear.”
In short, while insurers may choose to cover regular surveillance testing, they are under no obligation to do so unless the test can be supported by medical necessity. That’s why Vachette Pathology, a laboratory and pathology consulting and auditing firm, recommends labs to be prepared to establish direct billing arrangements with clients ordering surveillance tests.
“The most recent CMS guidance does not give cart-blanche coverage for all screening tests,” says Ann Lambrix, Vice President of Client Services for Vachette. “Screening tests will still have to be backed by medical necessity with documented reasoning in order to be covered by most payers.”
Lambrix adds that in general, those who want to test employees, athletes, or students for COVID-19 on a routine basis to assess reopening strategies or to gather data for public health purposes will most likely need to establish a client-bill arrangement to receive payment for those tests.
“Unless there is an outbreak or clear medically necessary reason for routine testing, the CARES ACT and FFCRA do not require insurance companies to deem the testing medically necessary and pay with no cost-sharing,” Lambrix says.
Items to consider when establishing client-bill arrangements:
- When establishing client-bill arrangements, labs should consult legal counsel since these agreements are very fact-dependent.
- Overall, laboratories must absolutely avoid pass-through billing arrangements.
- In evaluating client-bill arrangements, laboratories must first consider whether the federal Anti-Kickback Statute and Stark law are triggered. This analysis will be dependent upon the payors involved, the potential parties, and the nature of the arrangement. For example, offering the client a discount lower than what is publicly listed as a lab’s cash testing price could be viewed as a form of remuneration.
- Consider any state laws that may impact the ability to perform specimen collections or impact payment arrangements.
Practical dos and don’ts for client billing:
MAKE SURE:
- If client billing for surveillance testing, make sure a contract is in place.
- Have your legal team ensure contract language is both complaint and protective of the lab.
- If billing insurance plans, have supportive documentation as to testing for this group is medically necessary (ie: an outbreak in the facility, state-mandated). This information may be needed for appeal.
DON’T:
- Enter into a “gentleman’s agreement” with no contract in place.
- Agree to bill to insurance plans with no verbiage in your contract supporting the lab in the event of denials/future takebacks.
- Ignore accounts receivable (AR). Make sure there is timely payment and AR follow-up.
Feel free to reach out to Vachette (now is the part of Lighthouse) directly at 517-486-4262 if you would like to discuss details of your client bill arrangements or have questions about compliant billing for surveillance testing.
Also, check out our merger with Vachette Pathology in this Press Release.
Lighthouse Lab Services offers assistance to the clinical lab industry via Lab Management, Recruiting, LIS, Consulting, and Lab Director Services. Please, feel free to reach out to us if your lab needs any help.
Also, we operate the country’s largest members-only groups on social media. You’re welcome to join: