Hi everyone. Last week, on June 23, 2020, the Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of the Treasury (collectively, the Departments) issued new guidance regarding the employee benefits aspects of the Families First Coronavirus Response Act (the FFCRA), the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), and other health coverage issues related to Coronavirus Disease 2019 (COVID-19).
As you know, the FFCRA was enacted on March 18, 2020. The FFCRA generally requires group health plans to provide benefits for certain items and services related to testing for the detection of COVID-19 when those items or services are furnished on or after March 18, 2020, and during the applicable emergency period (the “Free Testing”). Under the FFCRA, plans must provide this Free Testing without imposing any cost-sharing requirements (including deductibles, copayments, and coinsurance), prior authorization, or other medical management requirements.
The CARES Act was enacted on March 27, 2020. The CARES Act amended the FFCRA to include a broader range of diagnostic items and services that group health plans must cover without any cost-sharing requirements, prior authorization, or other medical management requirements. The CARES Act generally requires plans providing Free Testing to reimburse any provider of COVID-19 diagnostic testing an amount that equals:
- the negotiated rate; or
- if the plan does not have a negotiated rate with the provider, the cash price for such service that is listed by the provider on a public website.
The requirement to reimburse the provider an amount that equals the cash price of a COVID-19 test is contingent upon the provider making public the cash price for the test, as required by the CARES Act. If the provider has not complied with this requirement, and the plan does not have a negotiated rate with the provider, the plan may seek to negotiate a rate with the provider for the test. However, the CARES Act is silent with respect to the amount to be reimbursed for COVID-19 testing in circumstances where the provider has not made public the cash price for a test and the plan and the provider cannot agree upon a rate that the provider will accept as payment in full for the test. The Departments note that the CARES Act grants the Secretary of HHS authority to impose civil monetary penalties on any provider of a diagnostic test for COVID-19 that does not comply with the requirement to publicly post the cash price for the COVID-19 diagnostic test on the provider’s website and has not completed a corrective action plan, in an amount not to exceed $300 per day that the violation is ongoing.
Note: If you run into the situation where an out-of-network provider is being unreasonable in setting the cash price, please let us know.
B. New Guidance
The new guidance clarified the following aspects of the FFCRA and CARES Act Free Testing requirements:
- Self-Funded Plans Must Comply. Self-funded health plans must comply with the Free Testing requirements.
- What Tests Must Be Covered? Free Testing is generally required for any of the following four tests:
- Approved Test. A test that is approved, cleared, or authorized under the Federal Food, Drug, and Cosmetic Act. All in-vitro diagnostic tests for COVID-19 that have received an emergency use authorization (EUA) under the Federal Food, Drug, and Cosmetic Act are listed on the EUA page of the Food and Drug Administration (FDA) website, available at https://www.fda.gov/medical-devices/emergency-situations-medical-devices/emergency-use-authorizations#covid19ivd. (At this time, the FDA has not cleared or approved an in vitro diagnostic test for COVID-19 under the other regulatory pathways outlined here.)
- Emergency Use Requested. A test where the developer has requested, or intends to request, emergency use authorization under the Federal Food, Drug, and Cosmetic Act, unless and until the emergency use authorization request has been denied or the developer of such test does not submit a request under such section within a reasonable timeframe. Available on the FDA website is a list of clinical laboratories and commercial manufacturers that have notified FDA that they have validated their own COVID-19 test and are offering the test as outlined in FDA guidance.
- State-Authorized Test. A test that is developed in and authorized by a State that has notified the Secretary of HHS of its intention to review tests intended to diagnose COVID–19. States and territories may authorize laboratories within that state or territory to develop and perform a test for COVID-19, as outlined in FDA guidance. States and territories that have notified FDA that they choose to use this flexibility are listed at https://www.fda.gov/medical-devices/emergency-situations-medical-devices/faqs-diagnostic-testing-sars-cov-2#offeringtests
- Maybe Other Tests. Other tests that the Secretary of HHS determines appropriate in guidance. No other tests have been specified in guidance by the Secretary of HHS at this time.
- Which Providers Can Order Free Testing? Free Testing must be provided “when medically appropriate for the individual, as determined by the individual’s attending health care provider.” A health care provider need not be “directly” responsible for providing care to the patient to be considered an attending provider, as long as the provider makes an individualized clinical assessment to determine whether the test is medically appropriate for the individual in accordance with current accepted standards of medical practice. Therefore, an attending provider is an individual who is licensed (or otherwise authorized) under applicable law, who is acting within the scope of the provider’s license (or authorization), and who is responsible for providing care to the patient. A plan, insurance company, hospital, or managed care organization is not an attending provider.
- At-Home Testing Must Be Covered. COVID-19 tests intended for at-home testing (including tests where the individual performs self-collection of a specimen at home) must be covered, when the test is ordered by an attending health care provider who has determined that the test is medically appropriate for the individual based on current accepted standards of medical practice and the test otherwise meets the statutory criteria in the FFCRA. This coverage must be provided without imposing any cost-sharing requirements, prior authorization, or other medical management requirements.
- No Free Testing For Employer Return-To-Work Programs. The FFCRA requires Free Testing only for diagnostic purposes. Clinical decisions about testing are made by the individual’s attending health care provider and may include testing of individuals with signs or symptoms compatible with COVID-19, as well as asymptomatic individuals with known or suspected recent exposure to SARS-CoV-2, that is determined to be medically appropriate by the individual’s health care provider. However, testing conducted to screen for general workplace health and safety (such as employee “return to work” programs), for public health surveillance for SARS-CoV-2, or for any other purpose not primarily intended for individualized diagnosis or treatment of COVID-19 or another health condition is beyond the scope of the FFCRA.
- Free Diagnostic Testing is Unlimited. The Free Testing required under the FFCRA is not limited with respect to the number of diagnostic tests for an individual, provided that the tests are diagnostic and medically appropriate for the individual, as determined by an attending health care provider in accordance with current accepted standards of medical practice.
- Facility Fee Related to Free Testing Must Be Covered. A facility fee is a fee for the use of facilities or equipment that an individual’s provider does not own or that are owned by a hospital. If a facility fee is charged for a visit that results in an order for or administration of a COVID-19 diagnostic test, the plan must also cover the facility fee without imposing cost-sharing requirements – to the extent the facility fee relates to the furnishing or administration of a COVID-19 test or to the evaluation of an individual to determine the individual’s need for testing. For example, if an individual is treated in the emergency room and the attending provider orders a number of services to determine whether a COVID-19 diagnostic test is appropriate, such as diagnostic test panels for influenza A and B and respiratory syncytial virus, as well as a chest x-ray, and ultimately orders a COVID-19 test, the plan must cover those related items and services without cost sharing, prior authorization, or other medical management requirements, including any physician fee charged to read the x-ray and any facility fee assessed in relation to those items and services.
- Reimbursement Requirements for Diagnostic Testing and Related Items or Services Only. The reimbursement requirements of the CARES Act (i.e., negotiated rate or cash price) do not apply to any items and services other than diagnostic testing for COVID-19.
- No Provider Balance Billing. The CARES Act generally precludes balance billing to the patient for COVID-19 testing. However, the CARES Act does not preclude balance billing for items and services not subject to the CARES Act, although balance billing may be prohibited by applicable state law and other applicable contractual agreements.
- Interaction of ACA Emergency Payment Rules and Required Free Testing. Under the Affordable Care Act, non-grandfathered group health plans offering non-grandfathered group coverage cannot impose cost sharing (expressed as a copayment or coinsurance rate) on out-of-network emergency services in a greater amount than what is imposed for in-network emergency services. Additionally, the Departments’ regulations provide that a plan satisfies the cost-sharing limitations in the ACA if it provides benefits for out-of-network emergency services in an amount at least equal to the greatest of the following three amounts (adjusted for in-network cost-sharing requirements): (1) the median amount negotiated with in-network providers for the emergency service; (2) the amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable amount); or (3) the amount that would be paid under Medicare for the emergency service (collectively, minimum payment standards). The minimum payment standards do not prohibit a group health plan from paying an amount for an emergency service that is greater than the amounts specified in the regulations. Because the Departments interpret the provisions of the CARES Act as specifying a rate that generally protects participants, beneficiaries, and enrollees from balance billing for a COVID-19 test, the requirement to pay the greatest of three amounts under the ACA is superseded by the requirements of the CARES Act with regard to COVID-19 diagnostic tests that are out-of-network emergency services. For these services, the plan must reimburse an out-of-network provider of COVID-19 testing an amount that equals the cash price for such service that is listed by the provider on a public website, or the plan may negotiate a rate that is lower than the cash price.
- Can Reduce Expanded Coverage Without 60 Day Advance Notice. The Departments previously announced temporary enforcement relief that allows plans to make changes to coverage to increase benefits, or reduce or eliminate cost sharing, for the diagnosis and treatment of COVID-19 (i.e., the Free Testing) or for telehealth and other remote care services more quickly than they would otherwise be able to under current law. A plan may also revoke these changes upon the expiration of the public health emergency related to COVID-19 without satisfying advance notice requirements. If a plan reverses these changes once the COVID-19 public health emergency or national emergency declaration is no longer in effect, the Departments will consider a plan to have satisfied its obligation to provide advance notice of a material modification with respect to a participant, beneficiary, or enrollee if the plan either (a) had previously notified the participant, beneficiary, or enrollee of the general duration of the additional benefits coverage or reduced cost sharing (such as, that the increased coverage applies only during the COVID-19 public health emergency); or (b) notifies the participant, beneficiary, or enrollee of the general duration of the additional benefits coverage or reduced cost sharing within a reasonable timeframe in advance of the reversal of the changes.
- Can Provide Telehealth to Employees Not in Health Plan. In light of the COVID-19 pandemic, a large employer may offer coverage only for telehealth and other remote care services to employees who are not eligible for any other group health plan offered by the employer. This relief is limited to telehealth and other remote care service arrangements that are sponsored by a large employer and that are offered only to employees (or their dependents) who are not eligible for coverage under any other group health plan offered by that employer. Under this temporary relief, the Departments will continue to apply otherwise applicable federal non-discrimination standards.
- Mental Health Parity Testing Can Ignore Free COVID-19 Testing. When performing the required mental health parity testing, plans can disregard the Free Testing required under the FFCRA.
- Wellness Programs Can Waive Standards. A plan may waive a standard for obtaining a reward (including any reasonable alternative standard) under a health-contingent wellness program if participants or beneficiaries are facing difficulty in meeting the standard as a result of circumstances related to COVID-19. However, to the extent the plan waives a wellness program standard as a result of the COVID-19 public health emergency, the waiver must be offered to all similarly situated individuals.