skip to Main Content
  • This page as PDF

Diagnostic Testing and Patient Screening Are Key to Successful US COVID-19 Response


As the novel coronavirus (COVID-19) spreads throughout the United States, media and policy focus on the rollout of diagnostic testing for the disease has greatly increased. Understanding the role of testing and screening is key to the control of this outbreak.

To date, the US is seen as lagging other countries in number of tests performed and turnaround time to results reporting. Additionally, although patients tested in public health labs and those with Medicare fee-for-service (FFS) coverage would face no out-of-pocket (OOP) costs for the test, and many commercial insurers have committed to first-dollar test coverage, some uninsured patients (and potentially some commercially insured) may see costs associated with testing that could further impede the public health response.

The COVID-19 Test

Multiple versions of a laboratory test for COVID-19 have been developed since publication of the virus’ genome. While the World Health Organization has released its own test, the US does not currently use this version and instead relies on a test developed by the Centers for Disease Control and Prevention (CDC). After initial reports of an issue with the first version of the test, the CDC has subsequently developed a new version. The CDC test is a real-time polymerase chain reaction (RT-PCR) test that allows for rapid identification of the viral genetic material from samples taken from persons under investigation. Turnaround times can vary by lab from about 3 to 7 days. However, recently developed kits may see result turnaround times as soon as 24 hours once production is scaled. The CDC test kit is being distributed directly to Clinical Laboratory Improvement Amendments (CLIA) certified laboratories by the CDC, and each kit can run 700–800 patient specimens. The CDC’s distribution is authorized by the FDA under an Emergency Use Authorization (EUA). The FDA recently expanded the EUA to allow individual CLIA-certified laboratories to develop and run their own versions of the COVID-19 test.

Testing vs. Screening

The CMS recently issued a clarifying memorandum to hospitals regarding Emergency Medical Treatment and Labor Act (EMTALA) requirements to screen patients. CMS noted that EMTALA creates a requirement for all hospitals with emergency departments (ED) to screen all patients who come to the ED, including those suspected of having COVID-19. This existing requirement does not necessarily include diagnostic testing, with CMS noting that the requirement is for a “medical screening exam” for signs and symptoms and epidemiological factors compatible with COVID-19 infection in line with CDC guidelines.

Per CDC guidelines, diagnostic testing should then take place for patients suspected of being infected with COVID-19. Patient samples are typically sent to reference laboratories–which may be either state public health labs or commercial labs–and subsequent testing will then be conducted at the CDC to confirm initial laboratory findings for positive test results. Patients diagnosed as positive in local laboratories are considered “presumptive positive” until CDC confirms the diagnosis, at which point they become “confirmed cases.” The variability in testing rates, variability in time to initial local results, and need for final CDC confirmation have created a delay in overall case reporting.

Medicare and Medicaid Coding and Coverage for COVID-19 Testing

The CMS has created 2 Healthcare Common Procedure Coding System (HCPCS) codes to describe COVID-19 testing, U0001 and U0002, for the CDC test and testing using any technique, respectively. These will be accepted on or after April 1, 2020, for tests conducted on or after February 4. CMS is asking providers to hold claims until April 1, when the system will have been updated with the new codes. Payment rates for Medicare patients are currently left to the discretion of Medicare Administrative Contractors (MACs). As of March 12, the MACs have established payment for the CDC test (described by U0001) at approximately $36, and payment for all other COVID-19 tests (described by U0002) at approximately $51.

Medicare (including both FFS and Medicare Advantage) will cover diagnostic testing for COVID-19. Medicare FFS beneficiaries are unlikely to encounter OOP costs as a PCR-based test is likely to fall under the Clinical Laboratory Fee Schedule, which does not require patient cost sharing. However, other services associated with diagnosis and treatment of the virus, such as lung CT, will require standard Medicare Part B 20% coinsurance up to a beneficiary’s deductible limit, which many patients may not have yet reached given that it is early in the year. This is likely mitigated by supplemental insurance coverage, which most Medicare patients have. Medicare Advantage plans may charge some level of cost sharing for COVID-19 testing, although Medicare allows these plans to waive cost sharing for the test at their discretion.

It is anticipated that all Medicaid programs will cover COVID-19 testing as well. Medicaid cost sharing will vary by state across services but is expected to be limited. The CMS issued guidance on March 12 noting that the COVID-19 test meets the criteria for a mandatory laboratory service under Medicaid, and that states may waive cost-sharing requirements for the test through a State Plan Amendment (which would apply to testing broadly, not just for COVID-19) or through a request for section 1115 authority to temporarily suspend copayments only for individuals needing treatment for COVID-19 infection.

Commercial Payer Coverage for COVID-19 Testing

Many large insurers have announced coverage for the test, and several large insurers committed to first dollar coverage for initial COVID-19 testing at a White House meeting with President Trump on March 10. While a large portion (~60%) of commercial insurance consists of self-insured employer plans that may opt out of coverage or cost-sharing requirements, we expect that many will provide coverage. Overall, however, there is potential for commercial cost sharing to vary depending on the insurance carrier and enrollee-specific plan. Additional commercial payer updates are likely in the coming days.

At least 11,000 tests have been performed by state public health labs or the CDC itself, which are free to patients. With the rollout of the CDC kit and commercial kits, more commercial CLIA-certified labs will begin to run the test, and more plans are expected to cover the test under this dynamic and evolving situation, likely resulting in $0 patient OOP for the test for most patients. As COVID-19 continues to spread in the US, testing rates and results will drive our understanding of the outbreak as well as the response.

To receive Avalere updates, connect with us.

Find out the top 2020 healthcare trends to watch.

From beginning to end, our team synergy
produces measurable results. Let's work together.
Back To Top