Is It Worth It? The Uncertainty of Insurance Recoupments for COVID-19 Testing Without a Health Care Provider’s Order

Apr 14, 2022
Munsch Hardt Legal Health Care Update

As we continue to attempt to return to our formerly normal lives, COVID-19 remains a constant in various forms such as exposure, infection, precautions, restrictions, testing, and vaccines. The availability of COVID-19 testing is expanding throughout the country, and although the demand for such testing has decreased, COVID-19 testing is here to stay.

The demand for COVID-19 testing has evolved from the first signs of symptoms and known exposures to now include precautions and peace of mind. The transition from quarantine and work-from-home to the office, public gatherings, sporting events, and concerts caused many to wonder how COVID-19 testing could help our new “normal” feel safe. Many municipalities are contributing to the new “normal” by providing access to free COVID-19 testing, in addition to the insurance-covered COVID-19 testing services offered by laboratories, hospitals, pharmacies, and other health care organizations.

In an effort to avoid medically unnecessary COVID-19 testing, CMS and many private health insurance issuers restrict their coverage of COVID-19 testing by requiring an order from a health care provider, such as a physician, practitioner, pharmacist, or other authorized health care professional. The scope of eligible health care providers was expanded from the typical physician and practitioner in September of 2020 to increase the access to medically-necessary COVID-19 testing. CMS addressed scenarios when testing is necessary and health care provider appointments are unavailable by allowing Medicare to issue payment for one COVID-19 test per person without an order from a health care provider.  All subsequent tests for the person would require such an order. A narrower scope of coverage from many private health insurance issuers is evident from their requirement of an order from a health care provider for all beneficiaries, regardless of the number of tests previously received. Many private health insurance issuers share the view of CMS that “it is contrary to the public interest to allow open-ended coverage of COVID-19 testing without an order due to the significant potential for fraud, waste, and abuse, as well as public health and safety issues that would arise from beneficiaries being subjected to testing without proper medical necessity or oversight.” Click here to read the full update from the Federal Register.

The restrictions implemented by CMS and many private health insurance issuers create risk for those operating in the spaces of surveillance (i.e., safety testing without symptoms or known exposure) and/or mass COVID-19 testing (e.g., pop-up testing sites) because many of those arrangements try to circumvent the need for an order from a health care provider entirely or obtain an order in unconventional ways that never result in an actual interaction between a patient and a health care provider, such as the use of off-site health care providers that issue and/or sign hundreds or thousands of orders after the specimen collection or testing and before submitting the claim for insurance reimbursement. Many of these entrepreneurs are likely to experience initial financial success with their testing models, but the longevity of such success is in the balance.

We speculate that many of the approved coverage claims will be audited and questions will be raised regarding the use of one or a few health care providers for hundreds or thousands of orders over a particular period, but for now, the outcomes are unknown.

To subscribe to our future Legal Health Care Update newsletters, please click here