The Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted on March 27, 2020, requires insurers to “provide coverage [for], and…not impose any cost-sharing (including deductibles, copayments, and coinsurance) requirements or prior authorization or other medical management requirements,” on COVID-19 testing. The CARES Act also requires that providers publicize the “cash price” of their COVID-19 diagnostic tests. If an out-of-work provider complies with this requirement, the CARES Act requires that the patient’s health plan to issue a reimbursement “in an amount equal to the cash price the provider lists on a public internet website.”
According to an October survey by America’s Health Insurance Plans (AHIP), this “cash price” requirement “eliminates [health plans’] ability to negotiate more affordable test prices” with out-of-network providers. AHIP’s survey indicates that the share of tests being administered by out-of-network providers has increased by 14% since July. Moreover, the share of out-of-network tests costing an amount “significantly higher” than the average price (i.e. $185 or more) increased by 10%. According to AHIP, this survey indicates that providers of COVID-19 tests are engaging in “price gouging,” which can be remedied by, among other things, Congress “setting a reasonable market-based pricing benchmark for tests delivered out of network.”
In the meantime, several states have already taken action to try and constrain costs. The insurance commissioners of Tennessee and North Dakota have urged out-of-network testing providers to accept reimbursement in an amount equal an insurer’s in-network rate. The state of Georgia has opened “a number of formal investigations into alleged price gouging” and the state of Florida has conducted at least one price gouging investigation of a hospital.
Regulatory interest in COVID-19 test pricing could wane as Americans gain access to several vaccines set to be approved for distribution in the coming weeks. However, according to Health and Human Services Secretary Alex Azar, there will not be enough doses to vaccinate all Americans until late March or early April of 2021, and even this timeline is considered optimistic by some experts. In the meantime, COVID-19 cases and deaths are reaching new heights, and this trajectory is expected to continue throughout most of the winter. States are therefore likely to continue to closely monitor COVID-19 test pricing well into next year.
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