Medicare now pays physician practices to provide OTC COVID-19 tests

Medicare will now pay physician practices and other eligible providers to distribute over-the-counter (OTC) COVID-19 test kits to beneficiaries. Patients with Medicare Part B coverage, including those enrolled in Medicare Advantage plans, can get up to eight tests per calendar month for the duration of the COVID-19 public health emergency.

No new enrollment process is required. Pharmacies and health care providers that currently provide ambulatory care such as vaccines, lab tests or other clinic-type visits to people with Medicare are eligible to participate.

The Centers for Medicare & Medicaid Services (CMS) established an HCPCS Level II code, K1034, to bill for these tests. The code is for a single test and includes all Food and Drug Administration-approved, authorized or cleared COVID-19 tests for which the specimen is self-collected and the test is self-administered. Providers submit claims for the tests to the same Medicare administrative contractor (MAC) to which they submit other Medicare claims. Other payers, including private insurance and Medicaid programs, may also utilize this code.

CMS established a fixed national payment rate of $12 per OTC COVID-19 test. If a participating pharmacy or health care provider usually charges less than $12 per test, then Medicare pays the lower amount.

To receive payment from Medicare, providers agree not to charge beneficiaries anything for their eight monthly tests. However, if a beneficiary has exceeded that limit, providers may seek payment from the beneficiary for the customary retail charge for any additional tests.

MACs will track how many tests each beneficiary has received in a month and automatically deny claims that exceed the limit (providers may inquire if the beneficiary has reached the limit before providing tests). Providers are encouraged to submit claims promptly, because Medicare will pay them in the order they are submitted.

If beneficiaries are aware that they have exceeded their limit, providers do not need to wait to receive a claim denial to charge the beneficiary the customary retail charge for the test. If beneficiaries have other coverage, such as Medicaid, the provider can submit a claim to that issuer if the Medicare claim is denied.

For more information, please see the related fact sheet on the CMS website. Medicare beneficiaries can get additional information by contacting 1-800-MEDICARE and going to: https://www.medicare.gov/medicare-coronavirus. Pharmacies and other health care providers interested in participating in this initiative can get more information here: https://www.cms.gov/COVIDOTCtestsProvider

— Kent Moore, senior strategist for physician payment, American Academy of Family Physicians

Posted on April 28, 2022, by Kent Moore