Covid Testing – Does Free Equal Frivolous?

The requirement by the federal government for commercial coverage of COVID-19 tests ends May 11, 2023. While some have stated concern over a potential inability to get the testing once it is no longer free under all insurances, payers may be currently paying for tens of thousands of tests going unused due to pharmacies pushing sales of these tests without patient need. We explore the change in coverage decisions and the concerns over payers currently covering the costs of unnecessary tests.

The original coverage required plans to cover up to 8 OTC (Over-the-Counter) tests (without prescription) for free and unlimited tests if ordered and administered by a healthcare professional following individualized clinical assessment or need for an underlying medical condition.

While commercial coverage is no longer required after May 11, 2023, those enrolled in the government Medicaid program for low-income individuals and families will continue to have access to free tests until September 2024. The decision on coverage and cost will now fall to payers. There are concerns about limiting access to these tests, however, they remain readily available in most retail pharmacies and have a shelf price of $20-$24.

The costs of these tests have been topping charts for many payers as one of the most expensive items usually categorically held by medications used for auto-immune diseases, cancer, HIV, and other costly health conditions.

Is this Waste?

In a recent white paper, “Network Audit – Result vs Remedies,” available on our Industry Insights page, we discussed a FWA scheme in which pharmacies submit claims that are not requested by the member. While this scheme in the past has been used by independent pharmacies to drive sales of unnecessary medications, it may just be that this is happening in pharmacies nationwide with pushing COVID-19 test sales. Historically, these schemes were only high-dollar medications, and there was collusion with telemarketers or prescribers yet, with COVID-19 tests, there appears to be the perfect storm allowing a high volume of waste, or even abuse, under the guise of a government directive. In this case, there is no need to engage the prescriber nor get a prescription in order to administer and bill payers for these tests.

Waste includes practices that, directly or indirectly, result in unnecessary costs, such as overusing services. Waste is generally not considered to be caused by criminally negligent actions but rather by the misuse of resources.

Pharmacies, including large chains, are asking patients if they want these tests even though they came into the pharmacy to purchase their routine maintenance medications. These patients are not symptomatic, not exposed and have no need for the test. While some patients may think, “Why not”, and just allow the pharmacies to spend their insurance companies’ money. What is also shocking is the volume of this waste

coming from large retail chains that typically steer clear of behavior on the FWA spectrum, yet, these chains are creating metrics and incentives to drive the volume of unnecessary tests. Metrics chain pharmacies previously used to monitor and drive vaccines (e.g. flu, pneumonia), which drives revenue yet also drives an increase in public health & safety, are now being used to drive revenue for COVID-19 tests. Is this waste?

Does asking a patient picking up a routine maintenance medication if they would also like one or even eight free tests represent waste? No symptoms, no exposure, and no need to document their status for travel or work. Does stockpiling of these COVID-19 tests by consumers represent waste?

Access to free testing during the pandemic helped patients seek healthcare quickly if they were symptomatic, exposed or had travel or work-related need, however, we seem to have moved into the access being a revenue stream where pharmacies are willing to walk the ethics line pushing testing to gain profits.

What should PBMs & vendors be monitoring?
Clients should ask their PBM or vendors to review claims for COVID-19 tests and look for patterns of inappropriate dispensing. Asking members to validate their need for these prescriptions and validate the dispensing practices of the pharmacy to legitimize the medical necessity for excessive COVID-19 tests. There is great concern that pharmacies are pushing the tests to meet business quotas to drive up revenue. The push for these tests to be covered by insurance without the need of the test by the patient is waste.

Also, clients should have their PBMs evaluate the cost of unnecessary tests that PBM-owned pharmacies have dispensed if these pharmacies were engaging in actions to push these tests to patients without the clinical need or patient request.

Should clients continue coverage for COVID-19 tests?
Clients should be reviewing their COVID-19 test utilization and consider eliminating or limiting coverage. Although there are concerns about minimizing access if coverage is eliminated, the cash cost and availability has remained strong. If the $20-$24 cash OTC cost is a concern as it may be cost-prohibitive for a specific population, alternatives would be to (1.) limit coverage to a single test (quantity limit) per month and additional only upon authorization, (2.) requiring a co-payment for these tests, (3.) allowing coverage only with a prescription (which may require network notification), or (4.) requiring an administrative authorization with a confirmation of use for symptomatic patients or patients with confirmed exposure would allow access to remain, while keeping costs down.

Clients should engage with their consultant to review the PBM management of COVID-19 diagnostic tests and focus on elimination or limitation of coverage to stop unnecessary tests and stockpiling.