CMS to Penalize Labs With Lower Payments for Slower COVID-19 Testing Turnarounds

Starting in January, the federal government will base Medicare payments for COVID-19 tests on labs’ ability to meet two-day turnaround times, docking them $25 per test for failure to reach the goal.

Medicare will pay labs the current $100-apiece rate for high-throughput tests only if they can complete them within two calendar days of specimen collection, the Centers for Medicare & Medicaid Services (CMS) announced Thursday. Those that take longer will only receive $75 per test.

“As America continues to grapple with the COVID-19 pandemic, prompt testing turnaround times are more important than ever,” CMS administrator Seema Verma said in a statement. “Today’s 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.”

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CMS raised the payment for high-throughput testing from $51 to $100 in April in an attempt to speed the process, though various providers — including nursing home operators — have reported lengthy delays in receiving results.

The updated structure will take effect this coming January 1, when the base rate will fall to $75; labs can pull down the extra $25 by meeting certain requirements.

“Medicare will make an additional $25 add-on payment to laboratories for a COVID-19 diagnostic test run on high throughput technology if the laboratory: a) completes the test in two calendar days or less, and b) completes 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,” according to CMS.

Automated high-throughput labs are those that can process more than 200 COVID-19 tests per day.

“CMS is working to ensure that patients who test positive for the virus are alerted quickly so they can self-isolate and receive medical treatment,” the agency noted.

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