New guidance released last week now requires private health insurers to cover the costs of up to eight at-home Covid-19 tests per person per month. But some insurers have criticized the mandate's implementation timeline, saying it will likely take weeks to establish a system to manage the new requirement.

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Background

According to new guidance released last week by HHS, the Department of Labor, and the Treasury Department, private health insurers must cover the costs of up to eight at-home Covid-19 tests per person per month, effective Jan. 15. For instance, a family of four would be covered for up to 32 at-home tests each month.

Under the guidance, insurers can set up programs at "preferred" pharmacies or retailers where the insurer will directly cover the cost of at-home Covid-19 tests with no out-of-pocket costs.

"Plans and issuers are strongly encouraged to provide direct coverage for [over-the-counter] Covid-19 tests to participants, beneficiaries, and enrollees by reimbursing sellers directly without requiring participants, beneficiaries or enrollees to provide upfront payment and seek reimbursement," the guidance states.

Under the guidance, individuals can also purchase tests on their own and seek reimbursement.

The guidance allows insurers to cap reimbursement per test at $12. However, plans also can "provide more generous reimbursement up to the actual price of" more expensive tests.

Biden orders 500 million additional rapid tests

In addition, President Joe Biden on Thursday announced that his administration would be ordering an additional 500 million Covid-19 tests that people will be able to request at no cost through a website at the end of the month.

According to the White House, these additional tests were ordered to meet future demand after Biden's initial order of 500 million tests in December have been distributed.

Although Biden did not specify when the additional tests would be ready for distribution, he said the administration was "on track to roll out a website next week where you can order free test shipped to your home."

Insurers say implementation timeline is 'exceedingly difficult'

While the new system could improve access to tests for millions of consumers, many insurers have argued that implementing the guidance—at least in the short term—will be difficult, the New York Times' "Upshot" reports.

In fact, some insurers said it would take weeks to establish the system proposed by the White House. This is largely because over-the-counter Covid-19 tests are very different than what insurers typically cover, such as doctor's visits and hospital stays, according to the "Upshot."

Currently, insurers do not have specific billing codes for Covid-19 tests. According to the "Upshot," health plans typically do not process retail receipts—they use digital claims systems that have preset formats and long-established billing codes. As a result, some insurers have decided to process the rapid test claims manually until they can establish a system.

"This is taking things back to the olden days, where you'll have a person throwing all these paper slips in a shoe box, and eventually stuffing it into an envelope and sending it off to a health insurer to decipher," said Ceci Connolly, president and CEO of the Alliance of Community Health Plans (ACHP).

Connolly criticized the guidance's implementation timeline, saying it was too fast since the government issued rules last Monday that took effect on Saturday. "It is going to be exceedingly difficult for most health plans to implement this in four days," she said.

Similarly, Bob Wanovich, a Highmark Health VP who works on provider contracting, said, "[t]he guidance came out Monday, and we started working on it immediately, but I don't have a mechanism ready to go, Day 1, where you don't have to pay upfront."

"Retailers need to have a process to capture the right codes, and submit it, and we need to be able to accept it on our end," he added. "These are the pieces that aren't there yet."

Separately, Ali Skinner, Capital District Physicians' Health Plan's VP for communications, said, "We're up against the clock right now." She added, "It's a big lift for us. We found out at the same time as consumers did on Monday."

Ultimately, insurers noted that the supply of tests will remain out of their control as test-kit shortages continue. "The bigger frustration our members have is over finding a test, and I don't have any control over the supply," Wanovich said. "We're working with our providers to figure out who has them, but we know it's in short supply." (Kliff, New York Times, 1/14; Sullivan, The Hill, 1/13; Shear, New York Times, 1/13)