COVID-19 Testing: New Federal Clarifications for Employers

You’ve probably heard of recent federal legislation affecting insurance coverage for COVID-19 testing and related services, such as the Families First Coronavirus Response (Families First) Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The federal government has taken steps to require certain kinds of insurance plans to provide coverage for testing (and related services) without cost-sharing, prior authorizations, or other medical management requirements.

New Guidance Issued

On June 23, three federal departments — the Department of Health and Human Services (HHS), the Department of the Treasury, and the Department of Labor — issued a second round of guidance on implementing these provisions.

The Centers for Medicare & Medicaid Services (CMS) has published an FAQ specifically related to the Families First Act which contains some useful information related to this guidance. (Click here to read the full document.)

CMS has confirmed that the Families First Act does not require employers and insurers to pay for COVID-19 testing that is not used for diagnostic purposes. This includes back to work purposes or general screening. And there are no exceptions for the uninsured or those receiving Medicaid coverage.

In the case of diagnostic testing, the law allows for quite a broad range of coverage. Tests must be approved by HHS (which includes tests approved by the Food and Drug Administration (FDA) on an emergency or temporary basis). But as long as one of these approved tests is ordered by an attending health care provider, “where medically appropriate for the individual,” then insurers must pay for it. And that’s even if there are multiple tests ordered.

COVID-19 Tests Not Covered

However, for tests that are not for diagnostic purposes, things get more complicated. If employers require their employees to have clean COVID-19 tests before returning to work, there are basically two options, neither of which insurance is required to help with under this legislation:

  1. Pick up the tab for testing themselves, or
  2. Ask employees to either cover it (which can be very expensive) or line up at one of the free public testing sites.

Implications for Compliance

As with most of the regulatory changes related to the pandemic, the devil is in the details here. Staying up to date on the latest guidance and clarification is the only way to be sure that you are providing the correct information to the rest of your organization.

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Protecting Hospital Finances in the Post-Pandemic Environment

It’s become a cliche, especially in healthcare, to say that COVID-19 has changed “everything”. One thing that has clearly changed, however, is hospital finances.

Pandemic response stretched every healthcare system in the United States, many to the breaking point. Revenues from non-COVID procedures were significantly reduced, to the point that furloughs of vital medical staff have become necessary.

In this environment, compliance professionals have an important role to play. Ensuring that all payment compliance regulations are being followed helps to protect existing revenue streams, and helps to get the system back on a strong financial footing. As hospitals are getting “back to normal” and trying to find ways to bolster their budgets, good compliance practices are vital.

Outstanding Payments and Patient Insurance

In-hospital treatments declined during the pandemic; however, virtual health visits significantly increased. It’s crucial to continuously monitor payment compliance practices, which include patient insurance information, especially when offering this new treatment vector.

Pre-pandemic, the number of Medicare patients increased by 11 million since 2014, and at least 37 states expanded Medicare eligibility in 2019. While it’s hard to say where Medicare coverage will go as government budgets also come under pressure, these numbers could mean that some outstanding medical bills may be covered.

Historically, about 1% to 5% of self-pay accounts, or patient out of pocket costs, are written off by hospitals as bad debt. Checking and double-checking that your institution has the right information about patients, now and going forward, can be a key step in keeping the hospital financially strong.

The number of uninsured patients has continued to grow — by 12% towards the last months of 2017, and 27 million Americans have lost their employer-provided insurance during the pandemic. Overall, improving payment compliance practices in relation to insurance is an important step in effectively managing these, and other, challenges with patient payment balances.

Reducing Readmission Rates and Penalties

If your hospital serves Medicare and Medicaid patients, you probably know the high number of readmissions that occur in typical months. Readmissions that take place within 30 days of an initial visit cost hospitals a staggering $41.3 billion. In a post-COVID world, these patterns may not hold — but that could mean that readmissions are going to go up, not down.

CMS instituted several programs to try to manage these readmission challenges.

  • The Hospital Readmissions Reduction Program (HRRP): rewards hospitals for lowering readmission rates for common health conditions like heart attacks, pneumonia, COPD, and total hip and knee replacement surgery
  • The Hospital-Acquired Condition Reduction Program (HACRP): encourages a reduction in avoidable infections resulting from colon surgeries and hysterectomies, bedsores, sepsis, and even blood clots

Hospitals with, according to CMS, higher than average readmission rates face steep penalties and lower claims reimbursement. In the fiscal year 2020, pandemic notwithstanding, 83% of the 3,300 hospitals in the U.S. were projected to face penalties. And these penalties can be as high as a 3% reduction in repayment. Across the United States, CMS penalizes the worst-performing hospitals with a 1% reduction in total claim reimbursement.

As hospitals reopen and restart regular procedures and treatment, and try to rapidly scale revenue generation, more hospitals may face penalties, if compliance practices are not strong. Surprisingly, at least 12% of readmission cases of readmission cases are preventable, according to the Medicare Payment Advisory Commission (MedPAC).

Two ways hospitals can comply with CMS’ regulations and boost patient care are:

  1. Embrace a process that sends discharge summaries to the primary care physician
  2. Assign staff follow-up on post-discharge test results.

Setting up such a process can be tricky, especially in larger hospital facilities and in facilities that are still challenged in the aftermath of COVID. Medical staff need to be able to consistently and quickly assign, track, and review summaries and test results.

Monitoring each step of the process is necessary to ensure that your organization is taking the proper steps to adhere to Medicare and Medicaid requirements. That way, your hospital easily avoids significant penalties while boosting patient care. CMS also recommends that hospitals be on the lookout for hospital-related illnesses, which can derail patient care standards.

What You Can Do

Staying on top of the ever-changing world of CMS regulations isn’t easy, especially as we emerge from the pandemic crisis. But we can help by providing you with expert advice and tools that target the regulations and policies needed to run your hospital compliance program more effectively.

Our fully customizable software helps you and your revenue cycle team stay on top of every regulation, so you’ll have the best possible chance of meeting essential mandates, keeping cash flowing and avoiding penalties.

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Easier, faster, more effective compliance is possible