On April 14, 2020, Governor Gavin Newsom announced six indicators that must be met before he will consider modifying California's statewide stay-at-home order. The first, and arguably most important, indicator is "the ability to monitor and protect our communities through testing…"¹

However, despite the widely recognized importance of COVID-19 testing and the role it will play in "getting us back to normal," implementing a robust testing program remains a serious challenge in the United States due to a lack of lab capacity, test reagents, test collection kits including nasal swabs, and personal protective equipment for laboratory workers and COVID-19 specimen collectors.

On April 7, 2020, the U.S. Department of Health and Human Services' Office of Inspector General released a report of its random survey of 323 hospitals across 46 states detailing its findings of severe shortages of testing supplies and long wait times for test results.² Nevertheless, the Trump Administration's top advisor on COVID-19 testing, Admiral Brett Giroir, Assistant Secretary for Health, projected on Saturday, April 11, 2020 that by May 2020 the United States will be in the "ballpark" of having the diagnostic testing capacity it needs.³

Admiral Giroir has described the following four necessary stages of COVID-19 testing:

1. Widespread surveillance to catch new flare-ups;
2. Testing of people who have specific symptoms;
3. Contact-tracing for confirmed cases; and
4. Antibody testing to know who's recovered from the virus.⁴ 

In addition, the Centers for Medicare & Medicaid Services (CMS), together with the Departments of Labor and the Treasury, also issued guidance on Saturday, April 11, 2020 "to ensure Americans with private health insurance have coverage of 2019 Novel Coronavirus (COVID-19) diagnostic testing and certain other related services, including antibody testing, at no cost."⁵

According to CMS, this "guidance implements the recently enacted Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) Act, which require that private health issuers and employer group health plans cover COVID-19 testing and certain related items and services furnished during the COVID-19 pandemic, with no out-of-pocket expenses."⁶ According to CMS, Congress has "required that all Americans, including people without health insurance, receive free diagnostic tests to determine whether they are sick with coronavirus."⁷

Innovations for COVID-19 Testing Await FDA Approval

There are two different types of COVID-19 tests currently being developed and offered in the United States - molecular tests and serology tests. Molecular tests assess active infection by detecting the viral RNA in a patient's sample (e.g., mucus from a nasal swab). By contrast, serology tests are designed to detect antibodies to the virus formed by a patient's immune system, and are thus useful to determine if an individual was infected in the past and has recovered. Serology tests are especially attractive because they are being developed for use in point-of-care settings, potentially posing far less risk to healthcare workers especially if they can be self-administered by patients in self-isolation.

On March 26, 2020, Vice President Mike Pence announced that a test is on the way from Abbott Laboratories. The test is a "point-of-care test, meaning that from the time to swab, to the time you get a positive result: five minutes, like the President said, and at most, 15 minutes for a negative result… think of it as a 15-minute test." Vice President Pence promised that by April 2, 2020, "Abbott will be providing 50,000, or more, tests per day."⁸

On April 10, President Trump stated, "When validated, we're confident that the production will scale up to tens of millions of tests very quickly."⁹ Both Vice President Pence and President Trump are recipients of COVID-19 point-of-care testing.¹⁰ On April 11, 2020, Admiral Giroir estimated point of care serology testing "will be available in the course of weeks."¹¹

Yet, as of April 15, 2020, although over 90 test developers have notified the FDA that they have serological tests available for use,¹² the FDA has granted Emergency Use Authorization (EUA) to only three serology tests.¹³ In fact, despite offering test developers an expedited pathway for serology testing, the FDA has effectively discouraged the efforts of serology test developers: on April 8, 2020, the FDA warned that dozens of developers face enforcement action – "some firms are falsely claiming that their serological tests are FDA approved or authorized, or falsely claiming that they can diagnose COVID-19. The FDA will take appropriate action against firms making false claims or marketing tests that are not accurate and reliable."¹⁴

Bringing COVID-19 Testing to Market

FDA Emergency Use Authorization (EUA)

Over the four months since the COVID-19 outbreak began in Wuhan, China, and with the virus sequenced and viral genome publicly available on January 5, 2020, the FDA has streamlined its regulatory process for evaluating new options so they can be available on an expedited basis.

The Food, Drug, & Cosmetic Act gives the FDA power to authorize the use of both unapproved tests and tests previously approved for other uses for the assessment of pathogens in an emergent public health crisis such as the present crisis. Under this expedited FDA process, test kit developers and laboratory providers must apply for Emergency Use Authorization (EUA) and submit evidence demonstrating the accuracy of diagnostics under an expedited process. EUA allows test kit developers (and laboratories) to bring test assays (and testing) to market based on lower standards of evidence than conventional FDA regulatory processes.

On February 29, 2020 and March 16, 2020, the FDA has instituted flexible EUA policies and offered continuing updates for clinical labs and test developers.¹⁵ In addition to allowing manufacturers to develop and manufacture COVID-19 test kits for distribution to and use by CLIA high-complexity labs (i.e., commercial, hospital and public health labs), the FDA has authorized CLIA high-complexity commercial, hospital and public health labs to develop in-house and perform laboratory-developed testing (LDTs) to test for COVID-19, through any of the following four pathways:

• Labs certified under CLIA to perform high-complexity testing may develop and use internally validated COVID-19 LDTs for up to 15 days after test validation while preparing an EUA request to FDA.
• A state or territory may authorize laboratories within that state or territory to develop and perform a test for COVID-19 under authority of its own state law, and under a process that it establishes.
• Commercial manufacturers may develop and distribute COVID-19 test kits for specimen testing for up to 15 days after manufacturer's validation of the test while preparing an EUA request where the manufacturer provides instructions for use of the test and posts data about the test's performance characteristics on the manufacturer's website.
• Labs certified under CLIA to perform high-complexity testing and manufacturers may develop COVID-19 serology tests, where the test has been validated, notification is provided to FDA, and certain FDA disclaimer information is included in the test reports. No EUA is required. The FDA also emphasized, "This policy does not apply to at home testing."¹⁶

Clinical Laboratory Improvement Amendments (CLIA) COVID-19 Guidance

According to CMS, the agency does not have the authority to grant waivers or exceptions of CLIA requirements during this COVID-19 emergency.¹⁷ However, despite this inability to grant waivers or exceptions, CMS has publicly stated that it will "continue to exercise flexibilities under current regulations and through enforcement discretion to address temporary and remote testing sites, use of alternate specimen collection devices, and implementation of laboratory developed tests."¹⁸

Nevertheless, the FDA's FAQs clarify the following points with respect to CLIA requirements:

• When FDA authorizes a test by EUA for use at point of care, this means the test is CLIA-waived. "The settings in which an EUA-authorized test may be used are described in the Letter of Authorization…. when the FDA authorizes point of care tests (including SARS-CoV-2 point of care test systems) under an EUA, such tests are deemed to be CLIA waived tests."¹⁹
• "Tests being offered prior to or without an EUA under the policies outlined in the FDA's Policy for Diagnostic Tests for Coronavirus Disease-2019 that have not yet been reviewed by the FDA, are not FDA authorized, and have not received a CLIA categorization. While FDA has indicated that such tests may be appropriate for use in clinical laboratories and by healthcare workers at the point of care, the policies in the Policy for Diagnostic Tests for Coronavirus Disease-2019 do not provide a CLIA categorization and do not override any CLIA requirements. Therefore, in accordance with CLIA, tests offered under these policies are considered high complexity by default until or unless they are authorized and deemed to be appropriate, through an EUA authorization or general FDA review processes, to be performed as moderate or waived complexity tests."²⁰

Separately, CMS has confirmed that COVID-19 testing can be performed in nontraditional settings – "Under CMS guidance, if a facility has the appropriate CLIA certificates and follows applicable CLIA regulations, state regulations and guidelines, the laboratory's CLIA certificate can be extended to cover testing in areas outside of the designated primary site or home base such as contiguous buildings, or any other designated temporary overflow location in its facility or temporary remote location, such as a parking lot."²¹

Reimbursement for COVID-19 Testing

While the EUA pathway, timetable and logistical challenges of achieving widespread availability and delivery of COVID-19 testing remain uncertain, especially point-of-care serology testing endorsed by the Trump Administration, the pathway to reimbursement for COVID-19 testing is proving to be far more straightforward. Significantly, the Trump Administration further fueled the advance of COVID-19 testing by announcing on April 15, that effective April 14, 2020, "Medicare will nearly double payment for certain lab tests that use high-throughput technologies to rapidly diagnose large numbers of 2019 Novel Coronavirus (COVID-19) cases."²² According to CMS:

This announcement builds upon recent CMS actions to expand testing for COVID-19. On March 30, 2020, CMS announced that hospitals, laboratories, and other entities can perform tests for COVID-19 on people at home and in other community-based settings outside of the hospital. This will both increase access to testing and reduce risks of exposure. Additionally, CMS took action to allow healthcare systems, hospitals, and communities to set up testing sites to identify COVID-19-positive patients in a safe environment.

Notably, however, the increased reimbursement is not available for serology testing to detect COVID-19 antibodies advocated by the Trump Administration.

Medicare

COVID-19 testing is a Medicare-covered service. CMS recognizes five new HCPCS and CPT codes for COVID-19 testing:

• U0001, for providers using the CDC's 2019-nCoV Real-Time RT-PCR Diagnostic Panel test.
• 87635, for providers performing COVID-19 testing by DNA or RNA amplified probe technique, not making use of high throughput technologies as described by CMS-2020-01-R.
• U0002, for providers performing COVID-19 testing by other techniques, not making use of high throughput technologies as described by CMS-2020-01-R.
• U0003, for providers performing COVID-19 testing by DNA or RNA amplified probe technique, making use of high throughput technologies as described by CMS-2020-01-R.
• U0004, for providers performing COVID-19 testing by other techniques, making use of high throughput technologies as described by CMS-2020-01-R.²³

Medicare reimburses around $36 for U0001, $51 for 87635 and U0002, and, with the April 14, 2020 increase, $100 for U0003 and U0004.²⁴ Medicare will also reimburse laboratories $23.46 for performing specimen collection for COVID-19 testing from homebound patients, and $25.46 for collection from an individual in a skilled nursing facility or on behalf of a home health agency, plus travel fees.²⁵

Medicaid

COVID-19 testing is a Medicaid-covered service.²⁶ Many State Medicaid Programs have released guidance on billing for COVID-19 testing.²⁷

Additionally, the Families First Coronavirus Response Act (FFCRA) authorized State Medicaid Programs to provide access to coverage for COVID-19 diagnostic testing, testing-related services, and treatment services, including all medically necessary care at no cost to individuals. In response, some State Medicaid Programs are enabling coverage for COVID-19-related testing services for patients who are not otherwise enrolled in the State's Medicaid Program but have no insurance or private insurance that covers COVID-19 diagnostic testing and testing-related services. For example, California's Department of Health Care Services is one state Medicaid program that has elected to extend coverage of COVID-19 testing services to state resident non-beneficiaries.²⁸

Commercial Health Insurance Plans

Likewise, the Coronavirus Aid, Relief, and Economic Security (CARES) Act – the sweeping economic relief package signed into law on March 27, 2020 – includes provisions addressing coverage of and payment for COVID-19 testing.²⁹ The first of these clarifies the FFRCA requirement that commercial health insurance plans must cover COVID-19 testing without any cost-sharing by enrollees.³⁰ Because the FFRCA provision did nothing to prevent so called "surprise billing" by an out-of-network lab testing provider (e.g., a clinical lab, hospital, or clinician office) that bills patients for the balance between the provider's list price and what the insurer chooses to pay, Section 3202 of the CARES Act is aimed at addressing this issue and to ensure that out-of-network lab providers receive payment for COVID-19 testing they perform. The CARES Act mandates commercial health plans to pay an out-of-network provider of COVID-19 testing "an amount that equals the cash price for such service as listed by the provider on a public internet website."³¹

The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.

FOOTNOTES

1  "Governor Newsom Outlines Six Critical Indicators the State will Consider Before Modifying the Stay-at-Home Order and Other COVID-19 Interventions," Office of Governor Gavin Newsom, available at: https://www.gov.ca.gov/2020/04/14/governor-newsom-outlines-six-critical-indicators-the-state-will-consider-before-modifying-the-stay-at-home-order-and-other-covid-19-interventions/
2  "Hospital Experiences Responding to the COVID-19 Pandemic: Results of a National Pulse Survey March 23–27, 2020," Office of Inspector General, U.S. Department of Health and Human Services, available at: https://oig.hhs.gov/oei/reports/oei-06-20-00300.pdf.
3  "U.S. Testing Capacity in 'Ballpark' for May Reopening, Czar Says," Bloomberg, April 11, 2020, available at: https://www.bloomberg.com/news/articles/2020-04-11/u-s-testing-capacity-in-ballpark-for-may-reopening-czar-says. Admiral Giroir was appointed by President Trump on March 13 to spearhead marshalling greater testing capacity nationwide. 
4  Id.
5  "FAQS ABOUT FAMILIES FIRST CORONAVIRUS RESPONSE ACT AND CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT IMPLEMENTATION PART 42," CMS, available at: https://www.cms.gov/files/document/FFCRA-Part-42-FAQs.pdf.
6  "Trump Administration Announces Expanded Coverage for Essential Diagnostic Services Amid COVID-19 Public Health Emergency," CMS, available at: https://www.cms.gov/newsroom/press-releases/trump-administration-announces-expanded-coverage-essential-diagnostic-services-amid-covid-19-public.
7  Id.
8  "Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task Force in Press Briefing," March 30, The White House, available at: https://www.whitehouse.gov/briefings-statements/remarks-president-trump-vice-president-pence-members-coronavirus-task-force-press-briefing-14/.
9  "Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task Force in Press Briefing," April 10, The White House, available at: https://www.whitehouse.gov/briefings-statements/remarks-president-trump-vice-president-pence-members-coronavirus-task-force-press-briefing-24/.
10 "U.S. Testing Capacity in 'Ballpark' for May Reopening, Czar Says," Bloomberg News, available at: https://www.bloomberg.com/news/articles/2020-04-11/u-s-testing-capacity-in-ballpark-for-may-reopening-czar-says.
11 Id.
12 "What serology tests are being offered under the policy outlined in Section IV.D of the Policy for Diagnostic Tests for Coronavirus Disease-2019?, FAQs on Diagnostic Testing for SARS-CoV-2," FDA, available at: https://www.fda.gov/medical-devices/emergency-situations-medical-devices/faqs-diagnostic-testing-sars-cov-2
13 "Emergency Use Authorizations," FDA, available at: https://www.fda.gov/medical-devices/emergency-situations-medical-devices/emergency-use-authorizations.
14 "Coronavirus (COVID-19) Update: Serological Tests," FDA, available at: https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-serological-tests.
15 The FDA has elaborated on its flexibilities through detailed, informative frequently asked questions (FAQs). See, "FAQs on Diagnostic Testing for SARS-CoV-2," FDA, available at: https://www.fda.gov/medical-devices/emergency-situations-medical-devices/faqs-diagnostic-testing-sars-cov-2.
16 "Policy for Diagnostic Tests for Coronavirus Disease-2019 during the Public Health Emergency," FDA, available at: https://www.fda.gov/media/135659/download.
17 "Clinical Laboratory Improvement Amendments (CLIA) Laboratory Guidance During COVID-19 Public Health Emergency," CMS, available at: https://www.cms.gov/files/document/qso-20-21-clia.pdf-0.
18 "CMS News Alert March 27, 2020," CMS, available at: https://www.cms.gov/newsroom/press-releases/cms-news-alert-march-27-2020.
19 "FAQs on Diagnostic Testing for SARS-CoV-2," FDA, available at: https://www.fda.gov/medical-devices/emergency-situations-medical-devices/faqs-diagnostic-testing-sars-cov-2.
20 Id.
21 "Clinical Laboratory Improvement Amendments (CLIA) Laboratory Guidance During COVID-19 Public Health Emergency," CMS, available at: https://www.cms.gov/files/document/qso-20-21-clia.pdf-0.
22 "CMS Increases Medicare Payment for High-Production Coronavirus Lab Tests," CMS News, April 15, 2020, available at: https://www.cms.gov/newsroom/press-releases/cms-increases-medicare-payment-high-production-coronavirus-lab-tests-0; see also, "CMS Ruling CMS-2020-01-R," CMS, available at:  https://www.cms.gov/files/document/cms-2020-01-r.pdf.
23 See, "COVID-19 Frequently Asked Questions (FAQs) on Medicare Fee-for-Service (FFS) Billing," CMS, available at: https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf?_cldee=anVkeUBqdWR5d2lsaGlkZS5jb20%3D&recipientid=contact-4d01407ec995e011ac48005056834d9b-217e32a7828a46239f5458c85b12912e&esid=a37922dd-737a-ea11-80e5-000d3a0f728a; and "CMS Ruling CMS-2020-01-R," CMS, available at:  https://www.cms.gov/files/document/cms-2020-01-r.pdf.
24 "Medicare Administrative Contractor (MAC) COVID-19 Test Pricing," CMS, available at: https://www.cms.gov/files/document/mac-covid-19-test-pricing.pdf
25 See, "Payment for Specimen Collection for Purposes of COVID-19 Testing, COVID-19 Frequently Asked Questions (FAQs) on Medicare Fee-for-Service (FFS) Billing," CMS, available at: https://www.cms.gov/files/document/03092020-covid-19-faqs-508.pdf?_cldee=anVkeUBqdWR5d2lsaGlkZS5jb20%3D&recipientid=contact-4d01407ec995e011ac48005056834d9b-217e32a7828a46239f5458c85b12912e&esid=a37922dd-737a-ea11-80e5-000d3a0f728a
26 "Is the test for the detection of COVID-19 coverable under Medicaid's mandatory laboratory benefit?, COVID-19 Frequently Asked Questions (FAQs) for State Medicaid and Children's Health Insurance Program (CHIP) Agencies," Medicaid, available at: https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf.
27 See, e.g., "Billing for COVID-19 Evaluation and Testing," Washington Health Care Authority, available at: https://www.hca.wa.gov/assets/billers-and-providers/billing-for-COVID-CPC-03-2020.pdf; "Medi-Cal Payment for Medical Services Related to the 2019-Novel Coronavirus (COVID-19)," California Department of Health Care Services, available at: https://www.dhcs.ca.gov/Documents/COVID-19/COVID-19_Medi-Cal_Services_and_Telehealth_Notice.pdf.
28 See, "COVID-19 Presumptive Eligibility Program," DHCS, available at: https://www.dhcs.ca.gov/services/medi-cal/eligibility/Pages/COVID-19-Presumptive-Eligibility-Program.aspx.
29 "Coronavirus Aid, Relief, and Economic Security Act," available at: https://www.congress.gov/bill/116th-congress/house-bill/748/text.
30 CARES Act, Section 3201.
31 Id., Section 3202(a).  Note the CARES Act (Section 3202(b)) also requires COVID-19 testing providers to publicize their cash price for the testing at their website, or face a penalty of $300 per day. 

[View source.]