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Uncertainty Surrounding CARES Act Reimbursement for Out-of-Network COVID-19 Testing

In response to the COVID-19 pandemic, Congress has attempted to make COVID-19 testing free to individuals by requiring commercial insurers to cover testing. However, federal guidance and action by commercial insurers have muddied the waters and left clinical laboratories in an unenviable position.

The Families First Coronavirus Response Act (FFCRA), passed by Congress on March 18, 2020, required commercial insurers to provide coverage of FDA-approved tests for the “detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19,” as well as items and services relating to a visit that results in such a test, at no cost to the beneficiary. Shortly thereafter, on March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act expanded the types of approved tests that were covered by the FFCRA and set the reimbursement rate for COVID-19 testing by out-of-network laboratories. Pursuant to the CARES Act, clinical laboratories must post their “cash price” for COVID-19 testing on their public website and insurers must reimburse out-of-network laboratories for COVID-19 testing at this “cash price.”

However, in June 2020, three government agencies, Department of Health and Human Services, Department of Transportation, and Department of Labor, released guidance that created several points of confusion regarding these requirements. For example, because the FFCRA and CARES Act only require coverage for testing for the “detection or diagnosis” of COVID-19, the June 2020 guidance excluded testing for employment, travel, and monitoring purposes from that which insurers were required to cover. Instead, the guidance required that the testing be done for the “individualized diagnosis or treatment” of COVID-19. Further, despite the FFCRA’s mandate that insurers cover items and services for visits that result in a COVID-19 test, the June 2020 guidance limited coverage to the testing itself and excluded from coverage “any other items and services.”

In addition, commercial insurers have inconsistently reimbursed out-of-network laboratories for COVID-19 testing under the FFCRA and CARES Act and offered inconsistent explanations of such reimbursements. This confusion is likely due to the questions created by the June 2020 guidance regarding which tests are covered and under what circumstances. Clinical laboratories are often left to balance the essential public service they provide and their own business interests with unclear regulations and inconsistent reimbursement.  This is a difficult task and laboratories should also be aware of considerations including price-gouging and consumer protection measures, as well as any discounts they are offering from the posted “cash price.”

Several members of Congress and industry personnel have separately asked the agencies to revisit and clarify the June 2020 guidance. Until they do so, laboratories will likely have to continue to thread the needle of billing commercial insurers for out-of-network COVID-19 testing.

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 clinical laboratories with COVID-19 testing and other regulatory issues. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or

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