New Guidance on Insurance Coverage of OTC COVID-19 Tests

On January 10, 2022, the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (DOT) (collectively, the Departments) jointly issued FAQs regarding the implementation of required insurance coverage for at-home COVID-19 tests under the Families First Coronavirus Response Act (FFCRA). Pursuant to the new guidance, insurance plans and issuers must provide coverage over the counter (OTC) COVID-19 tests without cost-sharing requirements, prior authorization, individualized clinical assessment, or other medical management requirements with respect tests purchased on or after January 15, 2022 and during the public health emergency. This new requirement is in addition to the existing requirement that insurers cover COVID-19 testing where there is an individualized clinical assessment by an authorized provider.

With respect to OTC COVID-19 tests obtained without a healthcare provider’s involvement, plans and issuers must provide coverage for the cost of the test at no expense to the participant, beneficiary, or enrollee, unless the conditions of a safe harbor discussed below are met. While plans or issuers are encouraged to reimburse sellers of OTC tests directly, they are not required to do so. Some plans or issuers may require beneficiaries to provide upfront payment and then submit a claim for reimbursement after the fact.

If a plan or issuer provides direct coverage of OTC COVID-19 tests, it generally may not limit coverage to only tests provided through preferred pharmacies or other retailers. However, under a safe harbor, the Departments have indicated they will not take enforcement action related to OTC test coverage against a plan or issuer that provides coverage for such tests by arranging for direct coverage through both its primary pharmacy network and a direct-to-consumer shipping program, and otherwise limits reimbursement for OTC tests from non-preferred pharmacies or other retailers to no less than the actual price, or $12 per test, whichever is lower. Under this safe harbor, plans and issuer may not impose any prior authorization or other medical management requirements on beneficiaries and may not require any upfront out of pocket payments by beneficiaries. Additionally, under this safe harbor, the direct-to-consumer shipping program may be provided through one or more in-network provider(s) or another entity designated by the plan or issuer.

If a plan or issuer otherwise provides coverage without cost sharing for COVID-19 diagnostic tests, the plan or issuer may only set limits on the number or frequency of OTC tests covered without cost sharing if the conditions of a safe harbor are met. Under this safe harbor, with respect to OTC tests purchased by beneficiaries without an individualized clinical assessment or healthcare provider’s involvement, the Departments have indicated they will not take enforcement action against a plan or issuer that provides coverage without cost sharing for such OTC tests, if the plan or issuer limits the number of OTC tests covered for each beneficiary to no less than 8 tests per 30-day period or calendar month. Similarly under this safe harbor, plans or issuers may not impose any prior authorization or other medical management requirements on beneficiaries. Also, even when relying on this safe harbor, plans and issuers must continue to provide coverage for COVID-19 tests administered with a prescription or provider’s involvement.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare regulation. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney  at 248-544-0888 or wapc@wachler.com.