Laboratories with COVID-19 testing programs scramble to source swabs, reagents, test kits, personal protective equipment (PPE) and trained staff. But that is not all. Getting paid is another issue.
There are numerous factors that make reimbursement for molecular polymerase chain reaction (PCR) tests to detect SARS-CoV-2, the virus the causes COVID-19, challenging. Chief among them, though, is that verifying insurance eligibility and demographic information on patients at emergency testing sites is probably not a top priority for the providers working at those sites.
Then there is the sheer volume of tests.
Robert Voelkner, Vice President of Sales and Marketing at LabVantage Solutions, explained, “The difference in this time of COVID-19 is that the volumes are now much higher and missed charges can have a serious effect on the hospital’s finances.”
The volume of tests is likely to rise dramatically as lab managers add serology tests to their COVID-19 diagnostic services.
Automating information collection
Once the specimens for the molecular tests arrive at labs, the goal is to run the tests and report results quickly because anxious patients are waiting, as are local public health officials and federal agencies.
“I don’t see labs holding up COVID-19 tests for billing purposes. They will do the test and worry about it afterward,” explained Jim O’Neill, Business Development Manager for Laboratory Services at Advanced Data Systems Corporation. “What is going to happen is laboratories are going to see a lot of denials,” he added.
Suren Avunjian, Chief Executive Officer at LigoLab Information System, agreed. “Missing patient demographics account for most laboratory denials.”
In the ideal situation, lab managers would verify patients’ demographic and insurance information early in the testing process using real-time automated processes on a system that integrates a lab information system (LIS) and revenue cycle management (RCM) functionality, rather than waiting until after a test result is reported, Avunjian said.
The problem is that many lab information systems are not designed to check demographic information at the time an order is placed, leading to costly and time-consuming manual processes for lab managers who opt to do this at the back-end of the process. However, tools like Address Validation from the United States Postal Service or Whitepages Lookup can help with thse manual processes, Avunjian said.
The same is true for insurance eligiblity. “There are a few LIS vendors that have the ability to check eligibility, but 90 percent of time it is checked on the billing platform,” O’Neill said. “Once you do the test and the eligibility fails, typically the lab or billing vendor goes back to the ordering physician and asks for updated billing information.”
In the case of molecular tests to detect SARS-CoV-2, O’Neill said he “strongly recommends” that labs run an eligibility check prior to billing because he expects the prevalence of inaccurate insurance information to be higher for these tests than what is usually the case.
Workflows in which tasks in the revenue cycle are automated and data flows easily between the LIS and RCM systems will increase efficiency. A shared data repository between the two systems also will have this result.
For healthcare providers, common manual processes involved in the revenue cycle cost an average of $29.27 per patient encounter, according to CAQH, a nonprofit alliance focused on streamlining administrative processes in healthcare.1
The average cost to providers per manual transaction is $5.30 for an eligibility and benefit verification, $10.92 for a prior authorization, $3.30 for a claim submission, $4.50 for an attachment to a claim, $6.65 for a claim status inquiry, $3.76 for a remittance advice and $2.51 for a payment, according to CAQH.
In addition to minimizing manual RCM processes, lab managers also should monitor how they deploy resources, adjusting as needed to improve efficiency. This will help ensure that reimbursement covers labs’ costs.
“PCR testing on instruments can be costly, so it is more important than ever to make sure your lab is batching and running these confirmatory tests wisely. It is going to be crucial to look at how many samples can be run in one batch to conserve reagent and control materials to keep costs in check. This also reduces the amount of time spent managing the data,” Voelkner said.
Deploying staff appropriately also is important, noted Lori Cross, Senior Director of Clinical Products for Laboratory Operations at Cerner Corporation. “Laboratory leadership should be evaluating volume and hours of work to determine if staff should be moved from one area to another and if schedules should be adjusted to accommodate varying specimen arrival times.”
To further ensure labs cover their COVID-19 testing costs, Cross said, “labs should insource testing to their own laboratories.” Taking the concept one step further, she added, “Many of our laboratories are now acting as a reference laboratory for other organizations.”Amy McCormick, MT, (ASCP), a member of the Beaker Lab Information System Technical Services team at Epic, recommended that lab managers track metrics—such as visit volume, charges, payments and accounts receivable—to determine the financial impact of COVID-19 testing on their organization.
Source: CAQH. https://www.caqh.org/sites/default/files/explorations/index/report/2019-caqh-index.pdf?
Lab managers have likely followed their usual procedures to accommodate new tests or blood banking procedures for COVID-19, such as modifying workflows, updating LIS and RCM software, and adding interfaces between the analyzers and the LIS.
Although there is a medical urgency to implement these changes quickly, Cross said, “We recommend laboratories refrain from cutting corners in terms of configurations and workflow.”
This has not been an easy process for everyone, she noted, because some labs had to “quickly onboard new instruments and test kits to bring COVID-19 testing in-house,” she said. One customer in New York, for example, built out the test routing rules in 72 hours to accommodate a surge in COVID-19 patients.
McCormick said there are workflows that are unique to the pandemic and require modifications to standard electronic processes at labs, such as the following:
Registering, documenting and creating instrument-ready labels for patients at drive-thru testing sites.
Filling testing orders from external organizations by creating interfaces to exchange test and result information.
Sending testing data daily to the Federal Emergency Management Agency (FEMA) and the Department of Health and Human Services (HHS).
In addition to testing, Cross said labs should be thoughtful about configuring workflows in blood banking to manage the receipt, testing and dispensing of COVID-19 convalescent plasma, based on the recommendations of the U.S. Food and Drug Administration (FDA) and International Society of Blood Transfusion, she said. Labs also should evaluate whether to extend platelet expiration dates to decrease the number of units that are disposed of without being transfused during this time of blood supply shortages.
Coding for COVID-19
After the test is complete and results are reported, the next step is creating a claim, beginning with new codes for these tests. Both the Centers for Medicare & Medicaid Services (CMS) and the American Medical Association’s Current Procedural Terminology (CPT) Editorial Panel have created new codes for the molecular tests to detect SARS-CoV-2.
For the AMA’s CPT code, the description is: “Infectious agent detection by nucleic acid (DNA or RNA); severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (Coronavirus disease [COVID-19]), amplified probe technique.”
The CPT code is 87635.
CMS developed two Healthcare Common Procedure Coding System codes for coronavirus testing.
The first, HCPCS code (U0001), is for laboratories using the Centers for Disease Control and Prevention’s (CDC) 2019-nCoV Real-Time RT-PCR Diagnostic Panel to test patients for SARS-CoV-2. The second HCPCS billing code (U0002) allows laboratories to bill for non-CDC laboratory tests for SARS-CoV-2 (COVID-19).
The Medicare claims processing system began accepting these codes on April 1, 2020, for dates of service on or after February 4, 2020. The American Medical Association suggests that lab managers check with individual commercial payers to find out which codes they require on claims for the molecular tests to detect SARS-CoV-2.
CMS doubles payment for COVID-19 tests
To encourage labs to perform the tests, CMS also doubled the payment for high-throughput molecular tests to detect SARS-CoV-2, the virus that causes COVID-19, the agency announced.
The agency increased reimbursement for the tests from approximately $51 per test to $100.
CMS noted that high-throughput lab tests, which can process more than 200 specimens per day, are costly to run because they use “sophisticated equipment that requires specially trained technicians and more time-intensive processes to assure quality.”
The new payment rate went into effect, beginning April 14, 2020, and will last through the COVID-19 pandemic.
For other COVID-19 laboratory tests, local Medicare Administrative Contractors (MACs) are responsible for developing the payment amount in their respective jurisdictions, CMS said. MACs are currently paying approximately $51 for those tests, the agency said.
Rules for testing insured patients
CMS—in conjunction with the Treasury Department and Labor Department—also issued rules to implement mandates in recently enacted coronavirus laws: Families First Coronavirus Response Act (FFCRA) and Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The laws require private health insurers and employer group health plans to cover COVID-19 testing, antibody testing and certain related items and services provided during a medical office visit, with no out-of-pocket expenses, or prior authorization or other medical-management requirements, according to a guidance document.
The rules extend from March 18, 2020, until the end of the COVID-19 pandemic.
The covered medical services include urgent care visits, emergency room visits, and in-person or telehealth visits with a provider that result in an order for or administration of a COVID-19 test.
The rules cover all FDA-authorized COVID-19 diagnostic tests, COVID-19 diagnostic tests that developers request authorization for on an emergency use basis, and COVID-19 diagnostic tests developed in and authorized by states. The rules also extend to antibody testing.
Because the Centers for Disease Control and Prevention (CDC) recommends that clinicians evaluate patients for other respiratory illnesses in addition to COVID-19, the plans and insurers also must pay for those tests if the tests lead to an order for a COVID-19 test. Blood tests and influenza tests would be two examples of such services, according to the guidance document.
In a guidance document, the three federal organizations also outlined several other key points pertinent for lab managers:
Plans and insurers are expected to reimburse providers for COVID-19 testing in an amount that equals the negotiated rate or the cash price for the service, as it is listed on a provider’s public website. However, the plan also may negotiate a rate that is lower than the cash price.
Providers must list the cash price for COVID-19 diagnostic tests on their public websites. Providers that do not do this or do not complete a corrective action plan may be fined up to $300 per day by HHS.
Funding for uninsured patients
As part of the FFCRA and CARES Act, the Health Resources and Services Administration (HRSA) will reimburse healthcare providers, generally at Medicare rates, for testing uninsured patients for COVID-19.
Balance billing is not allowed, and all claims must be submitted as complete, and balance billing and appeals of denied claims are not allowed.
The program also will reimburse providers for treating uninsured patients with a primary diagnosis of COVID-19 or who are pregnant with COVID-19 as a secondary diagnosis.
For testing, the HRSA will pay for specimen collection and both diagnostic and antibody testing. The agency also will pay for testing-related encounters with providers in office settings, urgent care centers, emergency departments or telehealth platforms.
For treatment, HRSA will pay for professional and facility charges in a variety of settings, including medical offices, inpatient units, emergency departments, skilled nursing facilities, long-term acute care facilities (LTAC), acute inpatient rehab and patient homes.
But as volumes of COVID-19 patients spike with future surges in infection rates, combined with widespread serology testing, lab managers should be prepared to process and bill for a huge volume of tests, while also monitoring their resource usage, labor costs and days in accounts receivable, among other metrics.
- 2019 CAQH Index. Conducting Electronic Business Transactions: Why Greater Harmonization Across Industry is Needed. CAQH website. https://www.caqh.org/sites/default/files/explorations/index/report/2019-caqh-index.pdf?token=SP6YxT4u. (Accessed April 28, 2020)