The Coronavirus Aid, Relief, and Economic Security (CARES) Act was developed to provide healthcare resources to fight COVID-19. Signed into law on March 27, 2020, the Act was designed to provide fast and direct economic assistance for US workers and their families, small businesses, and to preserve jobs.
Under the CARES Act, private health plans are required to eliminate co-pays, deductibles, and claim denials for COVID-19-related diagnostics and care. The Act also covers COVID-19 testing and testing-related visits for uninsured individuals, and treatment for uninsured individuals with a primary COVID-19 diagnosis.
An Issue with Co-pays
When initiated, the Act stipulated that private health plans are required to eliminate co-pays, deductibles, and claim denials for COVID-19-related diagnostics and care. However, recent data shows that some payers continue to charge co-pays and deductibles and deny eligible COVID-19-related claims, particularly for the serology test for antibodies.
Based on industry claims data, there was an approximately 22% improper denial rate in March and the beginning of April. This has been managed with most of the payers and is down to approximately 8%, half of which can still be resolved with a phone call. The other half must go through an appeals process.
Mispayments and Denials
Improper denials have posed more of a problem for the COVID-19 antibody tests. In March and the beginning of April, there was an approximately 43% improper denial or mispayment rate. This has been managed down to approximately 25%. But there is still work to be done.
Mispayments have been a problem because pre-existing CPT codes are being used for the antibody tests. Even though Medicare sets a price point for COVID-related antibody tests in the $40s, several payers are paying far below that amount.
Labs can continue to lower denial rates by promptly calling payers and educating them on the CARES Act and asking them to reprocess claims, which generally results in corrective action for future claims.
Blue Cross/Blue Shield Interpretation of the CARES Act
One issue that has not yet been resolved is the Blue Cross/Blue Shield payers’ policy to pay the patient directly for out-of-network (OON) claims. Most providers are still reluctant to generate any billing to COVID-19 patients to avoid a CARES Act compliance risk.
However, the Blues have interpreted the CARES Act requirement to not bill a COVID-19 patient as strictly applying to co-insurance and deductible. They argue that labs should bill the patient directly when the Blues pay the patient.
Another outstanding issue is reimbursement for COVID-19 tests that are part of back-to-work testing. A June announcement stated that payers would not be required to cover COVID-19 screening tests that employers may require as they bring employees back to work.
The American Clinical Laboratory Association (ACLA) and others have stated this decision creates widespread gaps in coverage and undermines the intent of the CARES Act, which was designed to promote covered COVID-19 testing at many sites without a physician's order.
Under the CARES Act, group health plans and health insurance payers must cover, without deductibles or other cost-sharing, “qualifying coronavirus preventive services,” including items, services, and immunizations intended to prevent or mitigate COVID-19.
However, certain medical billing provisions in the Act have led to an uptick in incorrect payments and claim denials that providers need to address to ensure accurate reimbursement and compliant patient billing.
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