AACC joined six other laboratory groups in calling for the Centers for Medicare and Medicaid Services (CMS) to use appropriate codes and payments for SARS-CoV-2 tests in the 2021 Clinical Laboratory Fee Schedule. CMS has proposed using the so-called gapfill process to assign payment for six new SARS-CoV-2 test codes in 2021, four for molecular testing, and two for immunoassays.

AACC and the other laboratory stakeholders however “strongly urge” CMS to adopt rates using a crosswalk rather than gapfill process because already substantially similar tests and rates can be matched to the new codes. Crosswalking matches a new code and payment to an existing one.

The gapfill process is problematic for several reasons. It leads to uncertainty about what the actual payment to laboratories will be part of the year, as CMS does not announce preliminary rates for any gapfilled codes until nearly half-way through the year. And the agency’s gapfill process would also mean different rates across the country.

In a letter to CMS, the stakeholder group recommends specific codes and payments the agency should use for the new test codes. “The specific crosswalks recommended by the stakeholders reflect the significant resources required to develop and furnish COVID-19 tests,” the letter says. “Clinical laboratories performing these tests continue to incur extraordinary costs in furnishing these tests—costs that are substantially in excess of costs incurred when performing amplified probe testing for a single type or subtype of influenza. These test developers have been acting under the hope that CMS would establish appropriate and fair reimbursement for this testing.”

Price Transparency Rule Opens Insurer’s Books

The Trump administration finalized a price transparency rule for healthcare plans that could have far-reaching implications for how both consumers and providers evaluate the cost of healthcare in the United States. The rule builds upon previous actions by the Centers for Medicare and Medicaid Services (CMS) aimed at increasing price transparency that gave patients access to hospitals’ standard charges and negotiated rates with third-party payers for all services, including clinical laboratory testing. According to CMS, this new final rule for health plans moves forward the agency’s goal of greater competition in the private healthcare industry.

A star feature of the rule is a requirement for health plans to give consumers real-time, personalized access to cost-sharing information, including an estimate of their cost-sharing liability, through an internet based self-service tool. Health plans will also be required to disclose on a public website their in-network negotiated rates, billed charges, and allowed amounts paid for out-of-network providers, and the negotiated rate and historical net price for prescription drugs.

“Price transparency puts patients in control and supports competition on the basis of cost and quality which can rein in the high cost of care,” said CMS Administrator Seema Verma. “CMS’ action represents perhaps the most consequential healthcare reform in the last several decades.”

Deadlines begin in 2023. Starting on January 1 of that year, health plans must launch the online shopping tool that will allow consumers to see the negotiated rate between their provider and their plan, as well as a personalized estimate of their out-of-pocket cost for 500 of the most shoppable items and services. Then starting on January 1, 2024, these shopping tools must show the costs for the remaining procedures, drugs, durable medical equipment, and any other item or service a patient might need.

In addition, by January 1, 2022 this rule will require plans to make publicly available standardized and regularly updated data files. According to CMS, these data files will open new opportunities for research and innovation. For example, technology companies can create additional price comparison tools and portals, as well as allow for new kinds of research studies and data analysis into how healthcare prices are set.

CMS in the final rule also deals with a particular issue around laboratory testing. Critics of the rule had said that the type of price data insurers will have to disclose would run afoul of a separate law that requires CMS to keep confidential the payer rates reported by laboratories. But CMS says the rule eludes this problem because neither the government nor its contractors will have an active role in publicizing the information.

Insurers have come out against the rule. Matt Eyles, president and CEO of America’s Health Insurance Plans, said the rule would not accomplish the intended goal. “We are committed to making healthcare more affordable for every American, but the approach in the rule is flawed,” Eyles said. “Competition experts, including the bipartisan Federal Trade Commission, agree that disclosing privately negotiated rates will reduce incentives to offer lower rates, creating a floor—not a ceiling—for the prices that drug makers, providers, and device makers would be willing to accept.”

HHS Contracts With InBios, Hologic for SARS-CoV-2 Testing

The Department of Health and Human Services (HHS) announced agreements with InBios and Hologic to expand SARS-CoV-2 testing. The first, a $12.7 million contract with InBios International, expands domestic production capacity for two rapid point-of-care tests for SARS-CoV-2.

One InBios test, called the SCoV-2 Ag Detect Kit, detects current infections by identifying antigens of the virus in a nasal swab sample. The other test, called the SCoV-2 Detect IgM/IgG kit, detects antibodies for the virus in a blood fingerprick sample, indicating whether the person had a previous infection. InBios will use the funds to ramp up production of either or both tests to 400,000 units per week by May 2021.

HHS also awarded Hologic a $119 million contract to expand production capacity for SARS-CoV-2 tests in the company’s supplier’s facilities in Wisconsin, Maine, and California. The parties expect the agreement to increase the suppliers’ production capacity to 13 million tests per month by January 2022.

In a statement, HHS notes that Hologic’s systems are in high demand, and currently 1,100 fully automated, high throughput Panther and Panther Fusion systems are installed around the country.

Hologic and InBios are two of many companies that have received ongoing support to develop SARS-CoV-2 tests from the Biomedical Advanced Research and Development Authority (BARDA), part of the HHS Office of the Assistant Secretary for Preparedness and Response. BARDA has so far supported development of 36 COVID-19 related tests. Of these, 16 have received Food and Drug Administration emergency use authorization.