Wednesday, April 15, 2020

CMS Doubles Payment for "High Volume" COVID Testing to $100; Uses Rare "Administrators Ruling;" Defines 200 Tests per Day

In a press release April 15, 2020, CMS announced it would double payments for "high throughput technologies" for COVID.

The news from CMS comes as the media are reporting a dramatic slowdown in COVID testing ( Politico, April 15, here).  Meanwhile, a STAT contributor foretells new test shortages (here).*  Democrats have urged the administration to show them a focused, tightly organized plan for COVID testing access (here).   And WSJ headlines, "Business leaders talk to Trump, demand more testing" here.   While CNN warns that serology tests for COVID may be flawed (here) does the NYT here... For an article on the CEO of California Blue Shield, heading the California COVID testing task force, here.

What's CMS to do?

What CMS Announced

CMS had previously announced a COVID test payment of about $51; the new doubled payment will be $100.

CMS states:
  • "Under President Trump’s leadership, the Centers for Medicare & Medicaid Services (CMS) today announced Medicare will nearly double payment for certain lab tests that use high-throughput technologies to rapidly diagnose large numbers of 2019 Novel Coronavirus (COVID-19) cases.
  • Medicare will pay the higher payment of $100 for COVID-19 clinical diagnostic lab tests making use of high-throughput technologies developed by the private sector that allow for increased testing capacity, faster results, and more effective means of combating the spread of the virus. High-throughput lab tests can process more than two hundred specimens a day using highly sophisticated equipment that requires specially trained technicians and more time-intensive processes to assure quality.
  • Medicare will pay laboratories for the tests at an even $100 effective April 14, 2020, through the duration of the COVID-19 national emergency." 
Issued As Urgent "Administrator's Ruling"

CMS would not (so far) use a press release to formally set agency policy or pricing.  For example, its MAC contractors are not bound to read the press release page hourly to look for new policies they must apply. 

Rather:  The press release is based on a "Ruling of the Administrator," a rarely-used mechanism where a "ruling' is issued on the CMS website that is binding on all contractors, staff, and administrative law judges.

The Administrator must provide a rationale for her decision.  Here, Administrator states that "$100 [is] a more accurate payment than the one currently in use via contractor pricing."  

There have only been 21 Administrator's Rulings since 1995 (25 years, less than 1 per year).  

See the April 14, 2020 Administrator's Ruling here.  (My cloud copy here.) 

CMS Creates New HCPCS codes:

In the ruling, CMS writes, 
  • U0003: Infectious agent detection by nucleic acid (DNA or RNA); severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), amplified probe technique, making use of high throughput technologies as described by CMS-2020-01-R.
  • U0004: 2019-nCoV Coronavirus, SARS-CoV-2/2019-nCoV (COVID-19), any technique, multiple types or subtypes (includes all targets), non-CDC, making use of high throughput technologies as described by CMS-2020-01-R.
  • It is noted that U0003 should identify tests that would otherwise be identified by CPT code 87635 but for being performed with these high throughput technologies. It is further noted that U0004 should identify tests that would otherwise be identified by U0002 but for being performed with these high throughput technologies. 
  • Finally, it is noted that neither U0003 nor U0004 should be used for tests that detect COVID-19 antibodies. 
I believe this is the first time an Administrator's Ruling has created a HCPCS code.  I believe CMS will also release a "Transmittal" or notice to MACs soon (appears here).

Qualifying Tests

CMS continues,
  • A high throughput technology uses a platform that employs automated processing of more than two hundred specimens a day. 
  • Examples of high throughput technology as of April 14, 2020 include but are not limited to technologies marketed on that date as the Roche cobas 6800 System, Roche cobas 8800 System, Abbott m2000 System, Hologic Panther Fusion System, GeneXpert Infinity System, and NeuMoDx 288 Molecular. 


Press & Associations
  • Rev Cycle Intelligence, here.  
    • Cites prior OIG report on shortages, here.
    • While the OIG report is no surprise to anyone who reads the news, I believe a formal OIG confirmation of the supply and tesst shortages helped CMS justify its actions, rather than, for example, just citing a newspaper as the justification.  
  • 360Dx, here.
  • Healthcare Dive here.
  • Motley Fool here.
  • ACLA praises new pricing, here.
Why $51 As Initial Price?

Industry insiders had remarked the $51 price was originally set by MACs by a fairly straightforward crosswalk relative to other PCR viral tests.   In that case, CMS did not formally "set a price" without notice and comment, rather, CMS merely posted a PDF that displayed the prices (all $51) that had been chosen by each regional MAC.   In this new case April 15, the price is issued directly from CMS central office and CMS policymakers  invoked the process of an Administrator's Ruling, which occurs rarely as discussed above.

See my March 17 blog on initial MAC pricing of COVID testing here.

Specimen Collection Fees: March 30 Federal Rulemaking

In some circumstances, CMS also pays specimen collection fees based on interim final rulemaking released March 30 (Fed Reg April 6).  Here.  G2023, G2024, $23, $25 (85 Fed Reg 19257-8).  (This is relative to typical collection fees around $3.)

Spat (Spit) About Home Saliva Tests

See an article in STAT by Erin Brodwin about whether it's legal to issue kits for home saliva collection, here.

Blues Plans Previously Have "Followed CMS Pricing"

BCBS-Illinois had previously posted that it would "follow CMS pricing" for COVID testing.  I've included the link (here) but I've quoted the text as it stands April 15, since it might change.

As of today, April 15, BCBS-IL writes,
Claims for COVID-19 Testing
If you test a member when it’s medically necessary and consistent with Centers for Disease Control and Prevention (CDC) guidance, submit the claim to us using Healthcare Common Procedure Coding System (HCPCS) code U0002. The Centers for Medicare & Medicaid Services (CMS) has set the price for the COVID-19 diagnostic tests. We will follow CMS pricing and apply the terms of our contracts.
Out-of-Network Providers
If you are not in our networks, our allowed amount for U0002 is consistent with Medicare pricing.


*  The STAT author spends most of his bandwidth on why the VALID Act is a very bad idea.


For an April 10 letter Hill to FDA re test accuracy, here.