March 10, 2020

CMS Issues New Medicare Reimbursement Guidance for Diagnosis and Treatment of Coronavirus

Holland & Knight Healthcare Blog
Melissa A. Wong
Healthcare Blog

The Centers for Medicare and Medicaid Services (CMS) has issued new guidance for frequently asked questions related to Medicare reimbursement for items and services provided in connection with the diagnosis and treatment of the coronavirus (COVID-19). While much of the guidance reiterates rules that have long been in place for Medicare billing and payment, it may be worth reviewing some of the following points within the context of the nationwide — and global — response to the current outbreak.

New Healthcare Common Procedure Coding System (HCPCS) Codes for Laboratory Tests

Starting in April, laboratories performing tests on patients to diagnose COVID-19 may use the newly created HCPCS codes U0001 or U0002 for services occurring after Feb. 4, 2020. The code U0001 should be used only for tests developed by the Centers for Disease Control and Prevention (CDC), while U0002 should be used by laboratories performing non-CDC tests. Local Medicare Administrative Contractors (MACs) will be responsible for determining payment for these HCPCS codes in their respective jurisdictions. As with other laboratory tests, there is no patient cost-sharing under Original Medicare.

Reimbursement for Home Visits and Telehealth

Evaluation and management services and other services furnished in a beneficiary's home by a physician or a non-physician practitioner will continue to be reimbursed by Medicare. Medicare will also pay for "brief communications" for practitioners to consult with patients for specific purposes, whether such communications are furnished by phone, email or an online patient portal. CMS expects that patients will usually initiate such communications, but practitioners are permitted to educate beneficiaries on the availability of these services. Medicare will continue to limit payment for telehealth services to services furnished to beneficiaries in certain types of healthcare facilities located in rural areas.

Reimbursement for Hospital Stays

If hospitals are at capacity and forced to use "alternate care sites" like a school gymnasium or other improvised location for non-critical care, Medicare will reimburse for care provided at these sites if the remote location satisfies all provider-based requirements as well as the hospital's conditions of participation. The hospital is expected to file an amended CMS Form 855A with its MAC to add an additional location. CMS generally requires a survey of compliance with all conditions of participation at new in-patient locations but notes that they have the discretion to waive this on-site survey. In addition, if hospitals are forced to isolate or quarantine patients to avoid infecting others, the patient may remain in the hospital for public health reasons even if he or she does not meet the need for acute inpatient care any longer. Patients who would have been otherwise discharged after an in-patient stay but must remain in the hospital under quarantine do not have to pay an additional deductible for quarantine in the hospital, and Medicare will pay the appropriate rate and cost outliers for the entire stay until the patient is discharged. Otherwise, hospitals will continue to be paid according to normal payment procedures, as there is no special diagnosis-related group (DRG) for COVID-19. Finally, we note that Medicare will not pay separately for personal protective equipment and supplies that help prevent the spread of infectious disease, as Medicare payments for healthcare services include the supplies to appropriately provide the service.

Future COVID-19 Drugs and Vaccines

Any potential drugs to treat COVID-19 that are covered under Medicare Part B, including new anti-viral drugs, or under Medicare Part D can be billed to each of those respective programs. If a vaccine for COVID-19 becomes available, Medicare will cover that vaccine under Part D. All Part D plans will be required to provide coverage for the vaccine. Any drugs or vaccines that may be distributed through the CDC's Strategic National Stockpile, however, cannot be billed to Medicare, as these items are typically provided at no cost.

Coverage for Extended Supplies of Other Medications

 The determination to cover 90-day or extended supplies of drugs to treat a patient's chronic condition lies with the local MAC. MACs must take into account the nature of the particular drug, the patient's diagnosis, the extent and likely duration of disruptions to the drug supply chain during an emergency and other relevant factors to determine when an extended supply of a drug is reasonable and necessary.

Reimbursement for Items or Services Provided by the Government

Under 42 CFR §411.8, Medicare does not pay for services that are paid for directly or indirectly by a government entity. However, this regulation contains an exception for services paid for by the government as a means of controlling infectious diseases. To the extent additional resources for infection control, such as supplies or staffing assistance, are made available from federal, state or local government agencies, Medicare permits an exception to allow payment for those services, as these are a means to control infectious disease.

We will continue to provide updates on any further guidance from CMS as to Medicare coverage, billing and reimbursement issues related to COVID-19.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact the author or your responsible Holland & Knight lawyer for timely advice.

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