Overview
Updated March 17, 2020
The Centers for Medicare and Medicaid Services (CMS) released several fact sheets on COVID-19 coverage and benefits, and announced a second Healthcare Common Procedure Coding System (HCPCS) code, U0002, for billing COVID-19 diagnostic tests. Medicare will accept claims with U0001 and U0002 starting on April 1, 2020, for dates of service on or after February 4, 2020. Relatedly, and effective immediately, the American Medical Association (AMA) released a new Current Procedural Terminology (CPT) code 87635 to report COVID-19 testing.
In Depth
On March 5, 2020, the Centers for Medicare and Medicaid Services (CMS) released several fact sheets on COVID-19 coverage and benefits, and announced a second Healthcare Common Procedure Coding System (HCPCS) code for billing COVID-19 diagnostic tests. Relatedly, CMS issued several FAQs on March 6, 2020, reiterating the new billing codes and the contents of the fact sheets and also addressing Medicare coverage for services provided in certain unusual care environments, such as care provided in patients’ homes, “alternative care sites” in the event a hospital’s surge capacity is exceeded, and ambulance services without transport.
Coverage and Benefits
Medicare Part A and B
CMS recognizes that there may be times when a beneficiary with COVID-19 must be quarantined in a hospital room even if acute inpatient care is no longer medically necessary. In those instances, Medicare will pay the hospital’s diagnosis-related group rate and any cost outliers based on the period of time until the Medicare patient is discharged, including any quarantine time after the patient no longer meets inpatient admission criteria. In addition, a patient will not have to pay any additional deductible for days in quarantine in the hospital if the patient would have otherwise been discharged. CMS reminds hospitals with private and semiprivate accommodations that Medicare prohibits hospitals from charging a patient a private room differential if the private room is medically necessary.
Medicare Part B covers medically necessary care provided in outpatient quarantine settings as well as medically necessary clinical laboratory tests and medical imaging tests. CMS announced via fact sheet that Medicare Part B will cover a COVID-19 vaccine if one becomes available.
Medicare Advantage (MA) and Part D
MA organizations may waive or reduce enrollee cost-sharing for COVID-19 laboratory tests as long as any waivers or reductions apply to all plan enrollees on a uniform basis. The US Department of Health & Human Services Office of Inspector General advised that an MA organization’s voluntary waiver or reduction of enrollee cost-sharing for COVID-19 laboratory tests will satisfy the qualified managed care plan safe harbor to the federal Anti-Kickback Statute.
MA plans also may provide their enrollees with access to Part B services via telehealth, which would allow plan enrollees to receive clinically appropriate services for treatment of COVID-19 from remote locations. For more information, see McDermott’s On the Subject “Bipartisan Bill Relaxes Federal Telehealth Requirements in the Wake of COVID-19.”
Consistent with coverage under Part B, if a COVID-19 vaccine becomes available, Part D plans will be required to cover it. MA organizations and Part D sponsors may choose to waive prior authorization requirements that would otherwise apply to tests or services related to COVID-19.
New COVID-19 Billing Codes
HCPCS
On February 13, 2020, CMS announced the development of HCPCS code U0001 used by laboratories to bill for performing the Centers for Disease Control and Prevention’s real-time RT PCR (rRT-PCR) assays for the detection of 2019-Novel Coronavirus (2019-nCoV).On February 29, 2020, the US Food & Drug Administration issued a new policy streamlining the process for certain laboratories to develop COVID-19 diagnostics. HCPCS code U0002 allows laboratories and healthcare facilities to bill Medicare for validated, in-house-developed COVID-19 diagnostic tests.
CMS expects these codes to encourage testing and improve tracking of COVID-19. Medicare will accept claims with U0001 and U0002 starting on April 1, 2020, for dates of service on or after February 4, 2020. These codes will be paid at rates established by Medicare Administrative Contractors (MAC) until CMS establishes national payment rates. On March 12, 2020, CMS published MAC payment rates for U0001 and U0002 (link). Payment rates for these codes will be ~$36 (for U0001) and ~ $51 (for U0002) until Medicare establishes national payment rates using its annual process later this year.
CPT
On March 13, 2020, the AMA Current Procedural Terminology (CPT) Editorial Panel announced the creation of a new Category I CPT code to report COVID-19 testing. The new code is 87635 “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.”
While the new CPT code is effective immediately, several issues remain unclear with respect to its implementation. Specifically, it is unclear whether Medicare will require providers to report the U-codes (i.e., U0001, U0002) it previously created or will allow providers to report 87635. It is also unclear how the MACs will price 87635 if it is recognized by Medicare. In addition, providers will need to manually upload the code descriptor into the electronic health record system until a new CPT code set is available for download later in 2020. And lastly, it is unclear how quickly third-party payers more generally will update their claims processing systems to recognize this new code.
