Insurers and COVID-19 Tests

The Biden administration had a good plan. But giving health insurers five days to execute that plan has led to problems for payers, pharmacies and consumers.

On Jan. 10, the administration instructed health insurers to cover the costs for every plan member to obtain eight FDA-approvedat-home COVID-19 tests at retail pharmacies or online each month.

Insurers were told to implement the plan by Jan. 15. For insurers, five days was not enough time, says Eileen Wood, chief pharmacy officer for CDPHP, a nonprofit health plan in Albany, New York.

The HHS rule calls for health plans to allow members to get those tests for free or the insurers need to set up systems to reimburse members as much as $12 per test for eight tests per member per month. When buying the tests, members do not need a physician’s prescription, nor do they need to have symptoms.

Some pharmacies have not had the tests in stock. Even those that do have not always followed the protocols that insurers set up. “We have to do more communications with our retail pharmacy partners, but so far it’s not been easy,” says Wood.

For CDPHP members to get the tests without cost at pharmacies, the pharmacies have told CDPHP that their systems require store staff to enter a prescriber’s name and National Provider Identification number, Wood explains. Without a prescription, some pharmacies have required CDPHP members to pay at the point of sale or the pharmacies need to enter the pharmacist’s name as the prescribing provider, she adds.

Communicating the details that the tests should be free to health plan members to each pharmacy in 29 counties is a challenge, she notes. In addition to the start-up frustrations, the cost of providing eight tests per month at $12 apiece for each of the health plan’s 400,000 members for an entire year could total more than $460 million, an amount equal to about 25% of the plan’s annual premium revenue, she notes.

Chris Kastman, M.D., the chief medical officer at Group Health Cooperative of South Central Wisconsin in Madison, also was worries about how much the new rule could boost premiums next year. “Even the most modest estimates call for what probably will be a 2% increase in premiums next year,” he says. “But those costs could be much, much higher depending on how it goes this year.”

Kastman and Wood say that establishing the payment systems has been a struggle. “Most health plans will piggyback off of their existing pharmacy network, which sounds easy,” Kastman explains. “But then you realize that our pharmacy benefit manager and the company that manages our pharmacy claims need to set up new workflows for all of their health plan clients all at once.” Kastman adds: “We set up everything we could and then watched with dismay how the people we work with, even with the best of intentions, just couldn’t quite get all the pieces in place in such a short time.”

Kaiser Family Foundation (KFF) researchers reviewed the COVID-19 test policies that 13 large U.S. health insurers had posted online in January. Six had established a direct-coverage option in which members can get rapid at-home tests without paying up front or having to file a claim if the member buys the test at a preferred network of pharmacies or from a mail-order pharmacy, KFF said. By allowing the direct-coverage option, HHS provided an incentive for insurers to simplify coverage for consumers and to contain insurers’ costs somewhat by putting a limit of $12 on what they must pay for the tests. After the KFF report came out in January, Blue Cross Blue Shield of Minnesota established a direct-coverage option and other insurers may follow suit.