CMS changes Medicare payment to support faster COVID-19 diagnostic testing

Oct. 21, 2020

The Centers for Medicare & Medicaid Services (CMS) announced that starting January 1, 2021, Medicare will pay $100 only to laboratories that complete high-throughput COVID-19 diagnostic tests within two calendar days of the specimen being collected, according to a press release. For laboratories that take longer than two days to complete these tests, Medicare will pay a rate of $75.

CMS said it took these actions to ensure that patients who test positive for the virus are alerted quickly so they can self-isolate and receive medical treatment. CMS previously took action in April 2020 by increasing the Medicare payment to laboratories for high throughput COVID-19 diagnostic tests from approximately $51 to $100 per test.

“As America continues to grapple with the COVID-19 pandemic, prompt testing turnaround times are more important than ever,” said CMS Administrator Seema Verma. “This announcement supports faster high-throughput testing, which will allow patients and physicians to act quickly and decisively with respect to treatment decisions, physical isolation, and contact tracing.”

Starting January 1, 2021, the amended Administrative Ruling (CMS 2020-1-R2) will lower the base payment amount for COVID-19 diagnostic tests run on high-throughput technology to $75 in accordance with CMS’s assessment of the resources needed to perform those tests. Also starting January 1, 2021, Medicare will make an additional $25 add-on payment to laboratories for a COVID-19 diagnostic test run on high-throughput technology if laboratories: a) complete the test in two calendar days or less, and b) complete the majority of their COVID-19 diagnostic tests that use high-throughput technology in two calendar days or less for all of their patients (not just their Medicare patients) in the previous month.

In April, CMS doubled the payment for COVID-19 tests performed using high-throughput technology to $100. COVID-19 testing using high-throughput technologies allows for increased testing capacity using an automated process that can administer more than 200 tests per day. The new payment amounts effective January 1, 2021 ($100 and $75) reflect the resource costs laboratories face for completing COVID-19 diagnostic tests using high-throughput technology in a timely fashion during the Public Health Emergency.

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