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Clinical Laboratories and Pathology Groups

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Getting Paid for COVID-19 Test Claims: Ways for Clinical Laboratories to Make it Happen Faster While Avoiding Post-Payment Audits

Legal, regulatory, and payer experts outline steps that help medical laboratories better navigate federal and state regulatory guidelines, eliminate coding and billing missteps, and maximize reimbursements

Even as daily COVID-19 test numbers continue to decrease, many clinical laboratories have substantial numbers of COVID-19 test claims that remain unpaid. Despite federal and state law requiring that labs be paid for these tests, commercial health plans are using many strategies to avoid paying labs for COVID-19 test claims.

That means a large portion of the nation’s labs are owed tens of thousands, hundreds of thousands, even millions of dollars for unpaid SARS-CoV-2 test claims they submitted since the onset of the pandemic last year.

To help clinical laboratories recover some or all of these monies, Dark Daily recently assembled a panel of lab billing experts for a webinar, titled, “Getting Paid for COVID-19 Test Claims: Prepare for Audits, Maximize Reimbursement, and Navigate New Payer Trends.”

What Clinical Labs Can Do to Be Paid for Their COVID-19 Test Claims

These four subject-matter experts provided insider tips and insights on steps clinical laboratories can take to get paid for COVID-19 test claims. This advice can help labs, maximize collected dollars, reduce the chance of post-payment audits, and navigate emerging payer trends.

Under the Families First Coronavirus Response Act (FFCRA), as amended by the Coronavirus, Aid, Relief, and Economic Security Act (CARES), payers must reimburse clinical laboratories for “medically necessary” COVID-19 testing. That requirement was underscored when the Biden administration issued new guidance on February 26, 2021.

During the webinar, Caitlin Forsyth, an Associate Attorney at Davis Wright Tremaine LLP in Seattle who specializes in healthcare regulatory compliance, said the new guidance “impressed upon commercial health plans the requirement to cover COVID testing in a lot of different circumstances.” The guidance included information on how providers can be reimbursed for providing COVID-19 care to uninsured people.

However, labs should be aware of what may come after they receive payment.

“We applaud you if you’ve had success thus far in securing reimbursement,” Forsyth continued. “However, clinical laboratories are not necessarily home free if Medicare, Medicaid, or a health plan has paid all or most of the lab claims for COVID-19 tests. This is because the payer may at some point down the line require the laboratory to submit to a post-payment audit. As part of the audit, the government payer or health plan is likely to require a laboratory to provide supporting documentation underscoring the medical necessity of each test performed on each patient at issue.”

What Constitutes ‘Medical Necessity’ for a SARS-CoV-2 Test?

There are many tripwires that can derail COVID-19 test claims. Medical necessity standards related to testing is one example that has been a major area of concern for clinical laboratories.

Kathryn Edgerton, Esq., Counsel at Davis Wright Tremaine LLP in Los Angeles, notes that the guidance providers have received has been “somewhat inconsistent and has created confusion as to what test is covered.” This lack of clarity in Medicare’s guidance has caused many denials of payment.

Special Report from Dark Daily

This Special Report from Dark Daily is the companion to the recent Dark Daily webinar on “Getting Paid for COVID-19 Test Claims: Prepare for Audits, Maximize Reimbursement and Navigate Payer Trends.” Clinical laboratory professionals can download the report by clicking here. (Photo copyright: Dark Daily.)

The webinar panelists provided the following three tips for optimizing billing claims for COVID-19 tests (additional recommendations on decreasing the number of COVID-19 test claim denials, increasing payments, and avoiding post-payment audits are available in the webinar’s on-demand replay and its companion special report):

  • When seeking reimbursement for COVID-19 testing from non-traditional sources, such as employers, schools, or local governments, ensure valid orders support each test claim. “Even if the employer, school, or local government has agreed to pay for the tests, a medical laboratory still must comply with state laws in regard to persons authorized to order the tests, as well as comply with CLIA requirements for a valid order,” Forsyth said.
  • Serial testing is on the rise in workplaces to increase the chances of detecting asymptomatic infection. However, Forsyth says, laboratories should “push for direct reimbursement from the workplace” because coverage from Medicare, Medicaid, and health plans is uncertain. “We also expect health plans to start cracking down on tests performed as part of an employment or surveillance program, taking the position that even if there are physician orders supporting each test performed as part of the program, health plans are not required to cover tests,” she added.
  • COVID-19-only testing providers and independent laboratories should expect health plans to begin narrowing their provider networks. To avoid being pushed out, Steve Stonecypher, Managing Partner at Shipwright Healthcare Group, says laboratories should “think about what you do, how you do it, and how you can be a benefit [to the health plan]. Make the payers think of you not as a nice-to-have in their network, but as a need-to-have in their network.”

COVID-19 Testing Labs Advised to ‘Have All Your Ducks in a Row’

Stonecypher urges clinical laboratories to be vigilant in record keeping, noting that the US Department of Health and Human Services Office of Inspector General (OIG) indicated earlier this year that it will conduct audits that focus on aberrant billing for COVID-19 testing during the pandemic.

“There are flags out there already that the OIG is potentially going to look to do claim audits,” he said. “You can pretty much guarantee that the payers are going to follow. So, have all your ducks in a row. We’re talking about all the individual patient assessments, all that necessary documentation … make sure all of that is in order because payers are going to look at this as an opportunity to come back and recoup money.”

Clinical laboratory leaders who want to learn more from this critical webinar can click here or place the URL in their web browser.

Billing and finance executives, clinical laboratory leadership, compliance officers, and billing and coding administrators are especially encouraged to listen to this webinar about increasing the number of COVID-19 test claims for which the lab is reimbursed. This webinar is available to stream on-demand.

This can be one of the best low-cost, high return investments your lab team can make, particularly if it helps the lab’s coding/billing/collections team interact with health insurance plans to settle SARS-CoV-2 test claims that then bring in tens of thousands or hundreds of thousands of dollars from outstanding claims that have yet to be paid.

Andrea Downing Peck

Related Information

Getting Paid for Covid-19 Test Claims: What Every Clinical Lab Needs to Know to Maximize Collected Dollars

FAQS about Families First Coronavirus Response Act and Coronavirus Aid, Relief and Economic Security Act Implementation Part 44

Thirty US Congress Members Ask HHS To Send COVID-19 Testing Funds Directly to Clinical Laboratories

US Representatives want clinical laboratories to have better support for their increased efforts to expand testing for the coronavirus

On June 8, Congressmen Tom Reed (NY-23), Scott Peters (CA-52), and 28 other members of the US House of Representatives sent a letter to Secretary of the Department of Health and Human Services (HHS) Alex Azar requesting that funds from the Paycheck Protection Program and Health Care Enhancement Act (H.R.266) be sent directly to clinical laboratories that have heavily invested in increasing their COVID-19 testing capacity.

In their letter, the Representatives wrote, “As you are aware, the recently enacted Paycheck Protection Program and Health Care Enhancement Act (PPPHCE Act) invests $25 billion in the [Public Health and Social Services Emergency Fund (PHSSEF)], including $11 billion for states, localities, territories, and tribes, to enhance all aspects of COVID-19 testing capacity. This funding is in addition to the funds already appropriated to the PHSSEF under the CARES Act.

“While laboratories are eligible, along with other providers, for these funds,” they continued, “there have been no federal funds specifically designated for the laboratories that have stepped up in this public health crisis and have made significant investments to expand access to COVID-19 testing despite 40-60 percent reductions in regular commercial volume due to the economic lockdowns.

“As laboratories work to maintain their investments in critical resources for testing platforms, reagents, swabs, and PPE, as well as hiring, training, and overtime pay for the laboratory workforce, we urge HHS to direct a portion of funding that has not already been allocated towards these efforts. These funds will ensure that labs can continue to rapidly scale up diagnostic and antibody testing, particularly for healthcare workers, first responders, and other Americans on the frontlines of this pandemic,” concluded the Representatives.

ACLA President Made Similar Plea for Direct Funding to Clinical Laboratories

As Dark Daily reported in “Federal Government Is Sending Nearly $11 Billion to States for COVID-19 Clinical Laboratory Testing and Testing-Related Activities,” in April, Julie Khani, President of the American Clinical Laboratory Association (ACLA), sent a similar letter to Azar urging the HHS to provide some of the stimulus money directly to clinical laboratories.

“In order to deliver accurate, reliable results for patients at a national scale, we must allocate funding to support [clinical laboratories’] expanded efforts,” she said in a statement following an April 27 meeting at the White House.

In her letter, Khani wrote, “It is essential that HHS allocate $10 billion from the fund to support labs’ further expansion of testing capacity to fulfill the testing needs of all of the states and to protect the lives and livelihood of all Americans.

“Further,” she continued, “HHS should note that investing in the nation’s laboratories will not only enhance testing capacity in the short-term, but it also will allow the country to benefit from a robust testing infrastructure for the duration of the COVID-19 pandemic and beyond.”

President Trump signed H.R.266 into law on April 24. It includes $25 billion earmarked for research, development, validation, manufacturing, purchasing, administering, and expanding capacity for COVID-19 testing. According to the language of H.R.266, that includes, “tests for both active infection and prior exposure, including molecular, antigen, and serological tests, the manufacturing, procurement and distribution of tests, testing equipment and testing supplies, including personal protective equipment needed for administering tests, the development and validation of rapid, molecular point-of-care tests, and other tests, support for workforce, epidemiology, to scale up academic, commercial, public health, and hospital laboratories, to conduct surveillance and contact tracing, support development of COVID-19 testing plans, and other related activities related to COVID-19 testing.”

“As the demand for testing continues to grow, clinical laboratories need dedicated funding to plan for challenges that lie ahead. Strong federal coordination and leadership is essential, and we’re looking forward to working with HHS to ensure that laboratories have the resources necessary to continue to expand our role at the forefront of the nation’s response,” said Julie Khani (above), President of the American Clinical Laboratory Association (ACLA), in a press release following the June 8 letter sent to HHS by 30 members of Congress requesting funds from H.R.266 be sent directly to clinical laboratories. Khani will be speaking on federal policies now impacting clinical laboratories at the upcoming 25th annual Executive War College on Laboratory and Pathology Management in New Orleans on July 14-15. (Photo copyright: ACLA.)

Financial Struggles for Hospitals and Clinical Laboratories

This new round of stimulus funding comes at a time when many providers and clinical laboratories are struggling financially, despite the influx of COVID-19 patients.

“Across the country, laboratories have made significant investments to expand capacity, including purchasing new platforms, retraining staff, and managing the skyrocketing cost of supplies. To continue to make these investments and expand patient access to high-quality testing in every community, laboratories will need designated resources. Without sustainable funding, we cannot achieve sustainable testing,” said Khani in an ACLA statement.

As the COVID-19 coronavirus pandemic evolves, federal regulations, as well as emergency funding for COVID-19 testing that is provided by federal legislation, will evolve in unexpected ways. For that reason, clinical laboratory leaders will want to closely track announcements by such federal agencies as the Department of Health and Human Services, the Centers for Medicare and Medicaid Services, the Food and Drug Administration, the Centers for Disease Control and Prevention, and the Federal Emergency Management Administration as decisions are made about how to assign the $25 billion authorized in H.R.266 for “testing.”

—Stephen Beale

Related Information:

Reps. Reed and Peters Lead 28 House Members in Calling on HHS to Allocate Additional Federal Support to Clinical Laboratories for COVID-Testing

Reed Leads Members in Requesting More Widespread COVID-19 Testing

Amid Growing Demand for Testing, Lawmakers Call on HHS to Designate Resources for Clinical Laboratories

The Paycheck Protection Program and Health Care Enhancement Act: Summary of Key Health Provisions

H.R.266 – Paycheck Protection Program and Health Care Enhancement Act

Special Bulletin: HHS Announces How it Will Distribute Additional Funds to Providers Under CARES Act

What Clinical Diagnostic Laboratories and Manufacturers Need to Know about the CARES Act

Latest Updates on the CARES Act Public Health and Social Service Emergency Fund

Lab Test Volumes Plummet as Patients Put Off Care

COVID-19 Bonanza: Stimulus Hands Health Industry Billions Not Directly Related to Pandemic

$75B Relief Bill Provides ‘Much-Needed Lifeline’ to For-Profit Hospitals

7 Healthcare-Related Items You May Have Missed in the $2T Coronavirus Stimulus Package

Coronavirus Strains Cash-Strapped Hospitals, Could Cause Up to 100 to Close Within A Year

ACLA Statement on Expanding Access to Testing

ACLA Letter to HHS on PHSSEF Direct COVID19 Test Funding

Federal Government Is Sending Nearly $11 Billion to States for COVID-19 Clinical Laboratory Testing and Testing-Related Activities