February 16, 2021
Area(s) of Interest: Public Health Payor Issues and Reimbursement
The California Medical Association (CMA) has asked the California Department of Managed Care (DMHC) and the California Department of Insurance (CDI) to investigate concerns that some health plans and insurers are shifting the financial risk of critical COVID-19 diagnostic testing to physicians on the front lines caring for their patients by reimbursing at far below the cost of the test itself.
The actions of these health plans and insurers are placing considerable financial and administrative burdens on a physician workforce already facing unprecedented demands due to the COVID-19 pandemic. Not only are these payors threatening public health by jeopardizing patient access to rapid COVID-19 testing, but their actions also appear to be inconsistent with DMHC’s emergency regulations and CDI's guidance on COVID-19 diagnostic testing, as well as the federal Coronavirus Aid, Relief and Economic Securities (CARES) Act.
The issue at hand is specific to reimbursement of COVID-19 rapid antigen tests (CPT code 87426). These inexpensive tests are used at the point of care and return a result within approximately 15 minutes. Each rapid antigen test kit costs physicians approximately $35-$40. However, CMA has heard from several physicians that Anthem and United Healthcare are reimbursing less than half of the physicians’ cost.
When payors shift the financial responsibility for COVID-19 testing to physicians, it becomes financially untenable for physicians to utilize the rapid test for their patients. Ensuring physicians can administer rapid antigen tests is critical, particularly when experts are calling for more rapid tests to allow for the reopening of the economy and schools.
CMA is strongly urging regulators to formally investigate and take appropriate action to ensure payors are not impeding patients’ access to appropriate and necessary COVID-19 testing in violation of state and federal law, and profiting at the expense of treating physicians.
At a time where health plans and insurers are enjoying record profits due to state and county ordered suspensions of elective procedures, the practice of shifting the financial risk of COVID-19 testing is unconscionable and should not be permitted.