BAC Journal > OTC COVID-19 Testing Coverage Required

OTC COVID-19 Testing Coverage Required

2022 Issue 2

In an effort to expand access to and affordability of at-home COVID-19 tests, on January 10, 2022, the US Departments of Labor, Health and Human Services (HHS), and the Treasury released guidance requiring both non-grandfathered and grandfathered health plans to begin providing coverage of FDA approved over the counter (OTC) COVID-19 tests without cost sharing, beginning January 15, 2022.

Plans must cover these tests without prior authorization, or other medical management requirements, and without an order or individualized clinical assessment by a health care provider. This guidance applies to fully, partially or self-insured or individual plans. Plans are required to cover eight OTC COVID-19 tests per 30-day period (or per calendar month) for each individual enrolled life in the plan. These eight OTC tests are in addition to tests ordered and read by a healthcare professional.

The guidance provides two options for compliance, one of which provides a safe harbor. With the first option, plans would qualify for the safe harbor if they provide direct coverage of OTC COVID-19 tests through both its pharmacy network and a direct-to-consumer shipping option, and allows the plan to limit reimbursement of OTC COVID-19 tests purchased through non-preferred pharmacies or other retailers to no less than the actual price, or $12 per test, whichever is less. The second option is a non-safe harbor option. With this option, participants must be reimbursed in full for both in-network or out-of-network claims. Under this option, plans may not limit the amount reimbursed for any test.

The guidance was further updated on February 4, 2022. This updated guidance provides significant flexibility in how direct coverage access to tests can be provided, to include through network retail pharmacies, the plan, other retailers, in-house or other physical locations, as long as participants have adequate access to tests with no upfront out-of-pocket costs. Additionally, it further clarified that a direct-to-consumer shipping program is any program that provides direct coverage of OTC COVID-19 test without requiring the individual to obtain or purchase the test in-person, which can include online or by telephone, and can be provided through the pharmacy or other retailer, the plan itself, or any other entity (such as the PBM) on behalf of the plan. Plans will also not fall out of qualification for the safe-harbor if they have established a direct coverage program that meets the safe-harbor requirements but are unable to provide adequate access to due a supply shortage.

The combined guidance permits plans to take reasonable steps to prevent, detect, and address fraud and abuse, including establishing a policy that limits coverage of OTC COVID-19 tests from established retailers that would be expected to sell OTC COVID-19 tests, and can disallow reimbursement for tests purchased from a private individual (in-person or online), or from a seller that uses an online auction or resale marketplace. Plans can also require participants to complete an attestation form to indicate that the test is not for employment purposes.

It will be important for plans to take steps to work with their medical carrier or pharmacy benefit manager (PBM) to establish coverage for OTC COVID-19 tests to ensure compliance with these new regulations. For any questions regarding coverage of OTC COVID19 tests for IHF participants, contact the IHF Fund Office at 1-888-880-8222