Agencies Issue Guidance on Coverage of OTC COVID-19 Tests
On Jan. 10, 2022, the Depts. of Labor, Health and Human Services (HHS) and the Treasury issued FAQ guidance regarding the requirements for group health plans and health insurance issuers to cover over-the-counter (OTC) COVID-19 diagnostic tests.
Plans and issuers must cover the costs of COVID-19 tests during the COVID-19 public health emergency without imposing any cost-sharing requirements, prior authorization, or other medical management requirements.
Under previous guidance issued back in June 2020, at-home COVID-19 tests already had to be covered, but only if they were ordered by a health care provider who determined that the test was medically appropriate for the individual. At that time, the FDA had not yet authorized any at-home COVID-19 diagnostic tests. Since then, several types of OTC at-home tests have been approved.
As of Jan. 5, 2022, the cost of these tests must be covered, even if they are obtained without the involvement of a health care provider. However, the FAQs do not require tests to be covered if they are not for individualized diagnosis (such as tests for employment purposes). Additionally, plans and insurance issuers may place some limits on coverage, such as:
- Requiring individuals to purchase a test and submit a claim for reimbursement, rather than providing direct coverage to sellers.
- Providing direct coverage through pharmacy networks or direct-to-consumer shipping programs and limiting reimbursements to other sources (the actual cost of the test, or $12, whichever is lower).
- Setting limits on the number or frequency of OTC COVID-19 tests that are covered (though they must cover no less than eight tests per month or 30-day period).
- Taking steps to prevent, detect and address fraud and abuse.
Insurance carriers have expressed readiness to comply with the administration’s announcement, however they have asked specifically about the potential to reduce price gouging.
“Every day, more Americans are being diagnosed with COVID-19. From the beginning, health insurance providers have taken decisive action to cover the costs of tests to diagnose and treat COVID-19 – and we continue to do so,” said Matt Eyles, president and chief executive officer of AHIP, in a statement. “We learned a great deal through that commitment and other key actions on COVID-19, and we recognize that the Administration’s guidance takes steps to mitigate the real risks of price gouging, fraud and abuse, which would limit access and reduce affordability for everyone.”
Additionally, some carriers, including AHIP, expressed concerns about the testing supply and coverage process. Kim Keck, president and chief executive officer of Blue Cross Blue Shield Association, echoed AHIP’s sentiments, but added a note of concern.
“We are concerned that the policy does not solve for the limited supply of tests in the country and could cause additional consumer friction as insurers stand up a program in just four days’ time,” Keck shared in a statement. “We will continue to partner with the administration and retailers to help make this work and advocate for policies that promote affordable and equitable access.”
The Alliance of Community Health Plans (ACHP) was particularly vocal about the need for established requirements for at-home coronavirus testing coverage. The organization urged the administration to require that claims include the cause for the test, standardize at-home coronavirus testing frequency recommendations, brace against fraud, deal with price gouging, and set aside a timeframe for at-home coronavirus testing claims submission.
The general requirement to cover OTC COVID-19 tests is not necessarily new – dating back to 2020 – however the conditions under which these tests are required to be covered are changing. Employers with fully-insured plans should expect their insurance carrier to handle these requirements. Those with level or self-funded plans should confirm that their TPA is prepared to handle these new requirements.
Supreme Court Silence Allows Federal Vaccine/Testing Mandates to Take Effect
Yesterday, Jan. 10, 2022, the Federal Occupational Safety and Health Administration’s (OSHA) Emergency Temporary Standard (ETS) on COVID-19 for employers with 100 or more employees technically took effect. Although many had anticipated that the U.S. Supreme Court might rule on the legality of the OSHA ETS prior to yesterday, the Court’s failure to do so means that covered employers should be prepared to comply with the ETS. Hopefully, the Court – which seemed divided on the ETS, but leaning towards overturning it – will issue a ruling prior to Feb. 9. In fact, the Court may have just given a hint as to when employers can expect to learn the fate of both the OSHA Vaccine ETS and the CMS Healthcare Vaccine Mandate, as it just released its updated calendar for the remainder of January. The update noted that at least one new opinion will be released this Thursday, Jan.13. Given the fact that it is not normal for the Court to issue opinions on a Thursday, some believe this could be a sign that the Court is reserving this day for the release of these important rulings.
It has been covered multiple times in Higginbotham newsletters and webinars that as of Jan. 10, employers needed to have policies in place to comply with the ETS. However, OSHA may consider an employer’s good-faith efforts to comply and said that covered employers are unlikely to see many citations in the next month unless they simply refuse to comply.
Employers that choose to offer employees the option of testing do not need to comply with that portion of the ETS until Feb. 9. Unless the Court pauses the rule, covered businesses have until Feb. 9 to ensure that all unvaccinated employees undergo COVID-19 testing on at least a weekly basis and refrain from entering the worksite if they test positive.
Reminder on Surprise Billing
By now, group health plan sponsors or their carriers should be posting the required notice informing participants of certain changes affecting how medical benefits may be billed under their health plan. This notice is required to be posted by all plan sponsors of group health plans and health insurance issuers offering group or individual health insurance coverage pursuant to the No Surprises Act (Act), which was passed as part of the Consolidated Appropriations Act passed in December 2020 (see the Higginbotham webinar on provisions of the CAA from last July here).
A model notice has been issued by the Department of Labor and generally must be:
- made publicly available;
- posted on the “public website” of the plan or the plan issuer; and
- included on each Explanation of Benefits that includes a service subject to the Act.
The notice must contain information relating to:
- the restrictions on balance billing in certain circumstances;
- applicable state law protections against balance billing;
- the new requirements regarding surprise billing, added by the Act to the Internal Revenue Code, ERISA, and the Public Health Services Act; and
- contact information for relevant federal agencies to report violations.
Plan sponsors of fully-insured group health plans may wish to speak with their insurer about the form and delivery of this notice. Additionally, employers may want to consider whether the notice will be posted with other employment-related notices, as well as whether the notice will be included in other benefit-related communications.