Q&A: Qualifying for additional reimbursement for COVID-19 diagnostic tests

Q: Starting January 1, 2021, CMS will be lowering reimbursement for high throughput novel coronavirus (COVID-19) diagnostic tests from $100 to $75. I understand that if certain requirements are met labs will be eligible to bill for a $25 add on code. How can we meet the requirements for the add on code?

A: Effective January 1, 2021, CMS will change the base rate for payments for COVID-19 tests run on high throughput technology to $75. However, CMS will make an add-on payment of $25 per test ($100 per test total) to labs who complete high-throughput COVID-19 diagnostic tests within two calendar days of specimen collection and who complete the majority of their COVID-19 diagnostic tests in two days or less for all of their patients (not just Medicare patients). CMS wants to improve test turnaround time in order to provide additional rationale for those who test positive to self-isolate and receive any needed treatment.  

CMS states that it is important the incentive is based on test turnaround for all patients (not just Medicare patients), but this creates an operational challenge from a billing perspective, as it will be up to the labs to bill a new HCPCS code (U0005) correctly to generate the $25 add-on payment. Because labs may not know right away whether the majority of their high throughput tests for all patients are completed in two calendar days, labs could bill all tests after performing them for the lower $75 payment and wait to submit adjustment claims for the add-on code U0005 for tests from the prior month after ensuring they were able to complete the majority of high throughput tests within the two calendar day requirement. Conversely, some labs may choose to wait to bill the prior month’s tests at all until they can verify that they met the time requirement and then bill the test code and the U0005 add-on code, but only labs with significant cash flow capability may be able to do this. Finally, labs may bill the add-on code for every test completed in two calendar days, but then submit adjustment claims if it fails to meet the majority of tests threshold.

For more information, see "Note from the instructor: CMS updates COVID-19 policies and guidance on testing, vaccination, and telehealth," by Valerie A. Rinkle, MPA, CHRI.