Economics of Testing During a Public Health Emergency: Lessons learned from two years of COVID-19

Selection of members of the 2021 Economic Affairs Committee of the Association for Molecular Pathology: Samuel Caughron, Jennifer Dien Bard, Pranil Chandra, Michaela Hollis, Susan Hsiao, Erika Miller, Jay Patel, Stefanie Rinehart, Navid Sadri, Ester Stein, Sarah Thibault-Sennett, Katherine Tynan, and Eric Vail, and Tara Burke. 



Clinical laboratories played an essential role in the U.S. COVID-19 pandemic response, providing visibility into the emergence, spread, and eventual molecular evolution of the virus. Unfortunately, laboratories also faced operational challenges and were in turn impacted by uncertain and confusing economic policies, especially during the early months of the pandemic.

During a public health emergency, changes must be made to coding, coverage, and pricing processes for tests and must be considered in the context of the overall financial impact to both the providers of testing and those who pay for it. While careful consideration is needed, the traditional time-consuming methods are challenged to meet the needs for an effective pandemic response where rapid, even daily, adjustments may be needed. 

In this white paper, AMP Economic Affairs Committee subject matter experts reflect on the first two years of the COVID-19 pandemic and the unique economic challenges faced by laboratories, particularly at the onset. Policies on coding, coverage, and pricing enacted to respond to the COVID-19 pandemic for SARS-CoV-2 molecular diagnostic tests are examined, and recommendations for how the challenges laboratories faced can be prevented (or at least mitigated) in the future are provided.

The overarching recommendation that will serve laboratories and patients more effectively as the COVID-19 pandemic continues into its third year and for possible future pandemics is as follows:

The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) should engage laboratory stakeholders early and across the spectrum of care delivery environments before laboratory policies are implemented. This recommendation will ensure that reactionary policies do not have unintended and negative consequences for laboratories and impede their ability to respond effectively.  


Additional recommendations include:

Priority 1. Coding

1.1 Coordination - AMP encourages CMS to coordinate early and broadly with the laboratory community, the AMA CPT® Editorial Panel, and other stakeholders regarding diagnostic coding. This would allow these key stakeholders to provide guidance and feedback on coding decisions.

1.2. Coding guidance - AMP urges CMS to work closely with stakeholders to develop a process for providing clear, up-to-date coding guidance relevant to the pandemic.

1.3. Interim codes and coding guidance – AMP encourages CMS to develop a process for rapidly developing interim codes and coding guidance using input from relevant stakeholders.


Priority 2. Pricing

2.1. Pricing accuracy - In the future, CMS should work with stakeholders to gain reliable data on the real-world costs of running a test during an emergency situation, which will improve pricing accuracy from the outset.

2.2. Consideration of all laboratory stakeholders - CMS should rely on laboratories from all sectors to set prices to ensure reimbursement is reflective of the costs of performing these tests in all settings, including in smaller laboratories. All laboratory stakeholder costs should be considered, as individual laboratories have different needs and some may require more resources to provide testing for their patient community.

2.3. Ensuring adequate reimbursement - In the future, CMS must ensure that the price of tests align with the resources required to develop and facilitate them as well as other costs associated with supply chain issues. CMS must ensure that the pricing for tests is completed in a timely fashion yet with opportunity for stakeholder input from across the spectrum of different partner laboratories.

2.4. Pricing considerations during a public health emergency - In future pandemics, CMS must ensure that reimbursement for testing aligns with the unique needs and costs associated with offering and maintaining testing and supplies under the uncertainty created by a public health emergency.

Additionally, elements outside the control of laboratories, such as turnaround time, should not be used as a consideration for payment or pricing.


Priority 3. Coverage

3.1. Align emergency coverage policies with non-emergency policies - Moving forward, policymakers must ensure emergency coverage policies are not more restrictive than the coverage standards in place during non-emergency situations.

3.2. Determining coverage policies - In the face of high demand for testing and a myriad of external pressures on laboratories to respond quickly during a pandemic, CMS must ensure that Medicare local coverage policies support the full range of tests available to appropriately diagnose and guide treatment, and do not contribute to significant burden on laboratories.

3.3. Remove burdensome ordering requirements - When testing is critical to responding to a public health emergency, as during the COVID-19 pandemic, CMS should act early to waive burdensome ordering requirements as a way to expand access to testing. As good practice, CMS also should avoid routinely making ordering requirements overly prescriptive, as these barriers only add to the burden on health care professionals during a pandemic.

3.4. Need for transparent guidance for laboratories - HHS and CMS should develop a process to provide clear, coordinated guidance on coverage policy for populations outside of existing policy, e.g., the asymptomatic, pre-symptomatic, and symptomatic individuals during the COVID-19 pandemic. Further, any change in policy, such as removing the requirement of a co-pay, should be accompanied by clear, coordinated guidance on how established processes for billing and coverage are impacted. Strong consideration should be given to relaxing the typical requirements for coverage so that laboratories can be confident they will be reimbursed for any testing performed.

3.5. Clarity for private payers – HHS must provide clear guidance to laboratories and private payers on coverage requirements and minimum payment amounts for necessary diagnostic tests during a public health emergency.


Priority 4. Genomic Sequencing

4.1. Need for federal guidance and resources - In order to ensure that a wide-range of clinical samples across the country are sequenced for public health surveillance, AMP encourages the development of federal guidance and funding that is accessible to all clinical laboratory types for these activities.


Priority 5. Reporting Requirements.

5.1. Plan for laboratory reporting - In preparation for the next pandemic, AMP suggests that the federal government, in consultation with clinical and public health laboratories, should ensure that federal funding streams and resources exist and are available to support laboratory reporting at the outset of any future pandemic.




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