As the COVID-19 pandemic continues to recede, efforts by commercial insurance carriers to claw back millions of dollars paid out for COVID-19 testing services are steadily increasing, creating an ongoing audit risk for healthcare providers, especially clinical labs. In many cases, efforts to get people tested, slow the pandemic, and ask questions later have turned into accusations of over-billing and demands that providers repay the insurance carriers.
Early in the pandemic, Congress required commercial insurers to cover certain claims for COVID-19 testing. However, Congress did not provide the insurers with funds to cover the cost of this mandate and some insurers have pushed back against lab claims for COVID-19 testing. As public opinion and political fervor over the urgency of testing has subsided, commercial insurers are taking advantage of the opportunity to audit COVID-19 testing claims, dispute payments they have made to the labs, and demand that labs make repayment, often for significant portions of the lab’s COVID-19 testing volume. These disputes generally focus on the same issues.
First, insurers may audit labs based on the requirement for an “individualized clinical assessment,” including whether the practitioner was authorized, whether the order for testing was within the scope of state law, whether the assessment was conducted by telemedicine or by a questionnaire, whether the ordering provider used a standing order, and what rules apply where a state does not or did not require an order for COVID-19 testing.
Second, federal law generally requires that insurers cover testing where an individual has symptoms of COVID-19 or a known, suspected, or potential exposure to the virus. Testing for return to work/school or for general screening purposes are generally not required to be covered, although insurers may choose to cover it. Testing for travel has generally become a contentious issue because, depending on the circumstances, it may constitute uncovered general screening, or, in the case of people who were exposed while travelling or who were unable to social distance per CDC guidelines while traveling, may constitute circumstances where testing would be covered.
Third, some labs have billed various codes for specimen collection and/or travel allowances, including G2023 and G2024. These codes were introduced specifically for specimen collection for COVID-19. Early in the pandemic, their requirements were not well understood, so labs billed these codes and insurers paid. However, as the requirements of these codes have become more well understood, insurers have begun to assert that labs frequently billed them when they were not appropriate.
Lastly, the federal coverage requirement generally required insurers to reimburse in-network labs for COVID-19 testing at the specified in-network rate, but to reimburse out-of-network labs at the lab’s “cash price” as listed on the lab’s website. This has frequently led to disputes regarding the cash price, especially where the listed cash price is significantly higher than other charges or reimbursement rates for COVID-19 testing (sometimes leading to accusations of price-gouging), where the lab lists multiple cash prices for multiple purposes, or where the cash price listed on the website is different from the price charged to individual, private, cash-pay patients.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters. If you or your healthcare entity has any questions pertaining to clinical lab audits or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or email@example.com.