Families First Coronavirus Response Act and Out-Of-Pocket Costs

Max isn’t in the habit of diving too deep into legislation. I normally would leave that interpretation to the experts and let them spell it out for me. I suppose desperate times call for desperate measures so I am going to take a stab at it. This is probably a good time to remind everyone that I am not an attorney. That said, I have watched A Few Good Men on more than one occasion. I love the scene where Colonel Jessep calls Tom Cruise out for having a “Harvard mouth”. Max, on the other hand, I am far from an academic. I probably sound a little more blue-collar.

But I am doing my best to stay on top of what’s going on with out-of-pocket costs related to COVID-19. I mentioned last week that Medicare and several large medical insurance commercial carriers had already stepped up to cover the COVID-19 lab test free of charge. If you were wondering, providers will receive about $51.31 from Medicare for the non-CDC lab test (U0002). Commercial insurance companies will likely pay much more. Yes, even in times like this, everything has a price tag. Then again, at least beneficiaries won’t foot any of the bill.

But last week, the president signed a new bill into law that, among many other things, specifically addresses out-of-pockets costs related to the test. It codifies what was already happening and makes it the law. To a certain degree, it went even further than just the lab test. But there is no doubt that this still falls short of mandating coverage for therapeutic services for COVID-19 (treatment). The bill mandates all payer sources (including government payers) to cover the COVID-19 lab test for free, and in some instances gets into some specifics on how this will be operationalized (particularly for Medicare). It even put in some protections for the uninsured. 

But today we are only going to look at the implications for commercial medical insurers. I suppose Max is being a little selfish by only looking out for himself in the event he needs a COVID-19 lab test. That, and I only have so much bandwidth.

With that, let’s drill down in this bill and see what’s in it. I am going to zero in on one section of it; the part where it talks about commercial insurance (including grandfathered plans) offering individual and group insurance.

Division F – Health Provisions

It all goes down in Division F. They title it “Health Provisions”. I would have probably called it “Max Out of Pocket Provisions,” but that’s me. This division directs all payers how to handle out-of-pocket costs for COVID-19 testing.

The first section, Section 6001, talks about coverage of testing for COVID-19. This speaks specifically for group and individual health insurance plans and even includes those grandfathered in by the Affordable Care Act.

The “Who” and the “What We Want Them To Do”

“In General.—A group health plan and a health insurance issuer offering group or individual health insurance coverage (including a grandfathered health plan (as defined in section 1251(e) of the Patient Protection and Affordable Care Act)) shall provide coverage, and shall not impose any cost sharing (including deductibles, copayments, and coinsurance) requirements or prior authorization or other medical management requirements, for the following items and services furnished during any portion of the emergency period defined in paragraph (1)(B) of section 1135(g) of the Social Security Act (42 U.S.C. 1320b–5(g)) beginning on or after the date of the enactment of this Act:

H.R.6201 – Families First Coronavirus Response Act

This paragraph is setting up the “who” and the “what we want them to do”. I usually take out several of the words and narrow it down so the Average Joe Max like myself can actually understand it. Max’s simplified interpretation goes something like this:

A specific group of payers shall provide coverage with no out-of-pocket costs for the following services:

I have personally seen the government get in trouble before in other areas of healthcare for using “shall” and not “must”, but that’s a story for another day.

Okay, What Services?

So I understand who we are talking about and what we want them to do. But what services are they mandating coverage for? In this part, they call out two specific things. First, it touches on the COVID-19 lab test itself. Then, it looks at items and services furnished in conjunction with the test.

In vitro diagnostic products (as defined in section 809.3(a) of title 21, Code of Federal Regulations) for the detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19 that are approved, cleared, or authorized under section 510(k), 513, 515 or 564 of the Federal Food, Drug, and Cosmetic Act, and the administration of such in vitro diagnostic products.

H.R.6201 – Families First Coronavirus Response Act

Max’s interpretation:

Both the administration of a legit COVID-19 lab test and the lab test itself is free when used to see if an individual has COVID-19.

Oh, but wait, there’s more. I bolded a few things for emphasis.

(2) Items and services furnished to an individual during health care provider office visits (which term in this paragraph includes in-person visits and telehealth visits), urgent care center visits, and emergency room visits that result in an order for or administration of an in vitro diagnostic product described in paragraph (1), but only to the extent such items and services relate to the furnishing or administration of such product or to the evaluation of such individual for purposes of determining the need of such individual for such product.

H.R.6201 – Families First Coronavirus Response Act

So this is where things get a bit confusing but I think we can handle it.

Max’s interpretation:

You only have to cover these “other” services if a free COVID-19 lab test is ordered during the encounter and those services are related to the giving of the free COVID-19 lab test or evaluating the patient to see if the free COVID-19 test was warranted in the first place.

So What Does This Mean?

My interpretation is a COVID-19 lab has to be ordered to trigger out-of-pocket costs to be waived. In other words, if we show up to the emergency room and don’t meet the guidelines to warrant a COVID-19 lab test (maybe we have the regular flu), we are still on the hook for out-of-pocket costs.

I think the government is trying to direct payers to only cover the lab test, services related to the lab test, and evaluation and management costs that come along with seeing if an individual needed the test in the first place. But a provider must order a test to trigger the out-of-pocket costs waived. They are clearly not requiring payers to cover anything else outside lab test and services that come with it. Therapeutic services are not on the table here.

It also seems like if other services provided are unrelated to the COVID-19 lab test, they will hit deductibles and co-payments as usual. So if I get another issue addressed (let’s say a broken leg) during the same encounter I get tested for COVID-19, the broken leg services will be carved out and hit my deductible and other out-of-pocket costs accordingly.

Final Thoughts

Just like Colonel Jessep ordered the code red in A Few Good Men, we need an order to waive COIVID-19 out-of-pocket costs.

But Max is not a lawyer. But I sometimes like to pretend I am Lt. Kaffee. Through this little analysis of the H.R.6201 – Families First Coronavirus Response Act, I think we have some clarity on where we sit with COVID-19 out-of-pocket costs as they relate to the medical insurance industry. We need an order for the COVID-19 lab test to waive out-of-pocket costs.

Frankly, I have not fully developed my opinion on how out-of-pocket costs should be handled for COVID-19 services. I know, it is hard to believe the mind behind a blog called “Max Out of Pocket” isn’t clear on the best course of action here. But this stuff is complicated. Ultimately, part of the idea of this blog was to help me get some clarity on my healthcare views.

I like the idea of covering the tests and the evaluation and management of an individual to see if they need the test even if it is not ordered. It removes a barrier for a patient who may be infected from getting checked out. The other side may argue it has the potential to flood emergency rooms with a bunch of Americans demanding their “free test” when they really don’t need to be there.

Trust, I am concerned about the potential tsunami of out-of-pocket costs that might be coming, particularly for our seniors. But as for a blanket waiver for all out-of-pocket costs, I don’t think I am there yet. We likely need a funding source to help people who are out of work and can’t afford their out-of-pocket commitments, but not everyone is in that boat.

What are your thoughts on this first step in mandating coverage of the COVID-19 lab test with no out-of-pocket costs to the patient? Where should we go from here?

Also, just another reminder Max is not an attorney. I am bound to get things wrong from time to time. If you are an attorney and want to correct anything here, feel free to call me out in the comments.


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