Penalties for COVID-19 Reporting Failures and Other New CMS Rules on Mandatory Testing and Ordering Limits

Bass, Berry & Sims PLC

Anyone conducting COVID-19 testing – whether using point of care or high complexity tests – should take note. On August 25, the Centers for Medicare & Medicaid Services (CMS) released an Interim Final Rule with comment period  (IFR) that contains new requirements and enforcement penalties related to the reporting of COVID-19 test results. These rules apply to laboratories, physician offices, urgent care centers, and anyone else providing COVID-19 testing through a CLIA Certificate of Waiver.

The IFR, which will become effective upon its scheduled publication on September 2, also imposes a new “one test rule” in connection with Medicare coverage of COVID-19 and related diagnostic (e.g., influenza and respiratory syncytial virus) tests without a practitioner order as well as refines its testing requirements for long-term care (LTC) facility residents and staff.

Read on to find out which requirements apply to your organization – and penalties you could face for failure to comply.

Reporting COVID-19 Test Results & Penalties

In reiterating the existing requirements under the CARES Act that laboratories report COVID-19 test results, the IFR and related guidance highlight that the COVID-19 test result reporting requirements apply to anyone performing point-of-care testing. More specifically, the IFR:

  • Applies to each laboratory performing SARS-CoV-2 tests (including molecular, antigen and antibody tests).
  • Applies even to providers only performing point-of-care testing pursuant to a CLIA Certificate of Waiver.

Laboratories and point-of-care testing providers must report results daily. Failure to comply with the new reporting requirements will subject providers to civil monetary penalties (CMPs) of $1,000 for the first day of non-compliance and $500 for each additional day of non-compliance. CMS is granting a one-time three-week grace period to begin reporting, likely meaning that CMS will not begin enforcing the reporting rule until September 23.

Note that the reporting requirements themselves are not new. The CARES Act requires every laboratory performing or analyzing a test to detect SARS-CoV-2 or diagnosis of COVID-19 to report results to the Secretary of the Department of Health and Human Services (HHS), and HHS issued guidance, FAQs and implementation specifications to effectuate the CARES Act’s requirements. Laboratories and other testing providers should continue to follow HHS’s guidance to report through existing state and local (or regional) public health data reporting methods. While HHS recommends reporting COVID-19 test results directly to the patient (or parent/guardian), reporting directly to patients is not required.

The IFR also includes penalties specific to LTC facilities. As of May 8, 2020, LTC facilities were required to report resident and staff testing results weekly to the CDC National Healthcare Safety Network. Now, pursuant to the IFR, any LTC facility’s failure to meet these reporting requirements will lead to a penalty of $1,000 for the first occurrence of non-compliance, which will incrementally increase by $500 for each subsequent failure, up to $6,500 for each subsequent occurrence of non-compliance.

Finally, although CMS is requiring that hospitals and critical access hospitals (CAHs) report COVID-19-related information as required by HHS, because CMS does not have the authority, similar CMPs for failure to report will not be assessed on hospitals and CAHs.

Limits on Medicare Coverage of COVID-19 Tests Without Orders: The “One-Test Rule”

To combat fraud, waste, and abuse, CMS is now limiting the number of COVID-19 tests (and related tests) that can be ordered without a physician or non-physician practitioner (NPP) order. Under the May 8, 2020 interim final rule, CMS permitted COVID-19 and related tests to be conducted without the order of a qualified practitioner and without a cap on the number of tests that could be ordered for a patient. Notably, however, for non-waived testing, requirements for a laboratory to obtain a qualifying practitioner order under CLIA and state laws have remained in place. Nonetheless, pursuant to the IFR, Medicare will only reimburse one COVID-19 diagnostic test and one of each other related diagnostic tests (e.g., tests for influenza virus and respiratory syncytial virus) without a qualified practitioner order.

Tests performed without an order before this IFR will not count toward the one test rule. Practically speaking, however, with a multitude of laboratories and providers conducting COVID-19 testing, it may be impossible for a laboratory to track or confirm whether a Medicare beneficiary has received their “one-test.”

Seemingly to ease the burden of obtaining a qualified practitioner order, under the IFR, CMS also establishes a policy that permits pharmacists and other applicable auxiliary practitioners to fulfill the requirements for COVID-19 test orders for Medicare patients if such orders and services are:

  • Provided pursuant to an “incident to” arrangement with a physician or NPP and
  • Permitted for such practitioner under state scope of practice and other applicable laws.

The actual regulatory text leaves some uncertainty whether the order must be from a physician or NPP who is “treating” the patient, or auxiliary practitioners acting “incident” to a “treating” physician or NPP.  Ultimately, it seems unlikely that CMS means to impose the “treating” practitioner requirement given CMS has enabled practitioners to bill for assessment and specimen collection of both new and established patients.

COVID-19 Testing Requirements in Long-Term Care Facilities

In addition to the new penalties for failure to comply with COVID-19 testing reporting requirements, LTC facilities (including nursing homes and skilled nursing facilities) also face new refined rules related to the categories of individuals and frequency with which they must be tested for COVID-19.

Under the IFR, LTC facilities must test residents and staff (including individuals providing services under arrangement and volunteers) for COVID-19 according to certain parameters set forth by HHS. Such parameters include testing of staff and residents with signs and symptoms of COVID-19, testing in response to an outbreak, and routine testing of LTC facility staff.

Notably, CMS has revised the standard for routine testing of LTC staff to be based on the positivity rate in the local community as follows:

  • Counties with a positivity rate of less than 5% must test at a minimum of once per month.
  • Counties with a positivity rate of 5-10% must test at a minimum of once per week.
  • Counties with a positivity rate of more than 5% must test at a minimum of twice per week.

Different testing standards, however, may still apply under state law and/or guidance. In conjunction with the IFR, CMS issued guidance to state survey agencies that provides further detail regarding LTC facility testing requirements.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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