Labs that take longer than two days to complete coronavirus tests will see federal payments cut $25 per test under a new policy to begin Jan. 1.
The agency overseeing Medicare will pay labs $100 per coronavirus test completed on a high-volume machine within two days of collecting a specimen. Labs that take longer will get only $75 per test next year, according to the Centers for Medicare and Medicaid Services.
Large labs routinely took one week or longer to process coronavirus tests this summer when cases spiked and Americans flocked to doctors' offices, pop-up sites and chain pharmacies to get tested. Such a delay in reporting results rendered tests useless for tracing the contacts of infected individuals.
Dr. Nirav Shah, a senior scholar at Stanford University’s Clinical Excellence Research Center, said the payment change may compel labs to improve turnaround times.
"The incentives are now aligned to improve turnaround time, not simply maximize volume of tests," said Shah, a former Commissioner of the New York State Department of Health. "For public health, any test that's delayed more than one (or) two days is useless for contact tracing."
But industry officials say payment cuts won't fix underlying challenges labs face.
The American Clinical Laboratory Association, an industry organization representing private commercial labs, said labs have taken steps to increase capacity and improve turnaround times.
"We’re concerned this policy could create a domino effect where patient access to testing is severely reduced," ACLA President Julie Khani said in a statement. "Cutting laboratory reimbursement won’t address the root causes of delayed turnaround times."
Labs still can't get the chemicals they need to run the tests or the plastic materials such as pipettes or tubes to transport specimens, said Dr. Patrick Godbey, president of the College of American Pathologists.
Godbey, a lab director at Southeast Georgia Regional Medical Center in Brunswick, Georgia, said shortages of chemical reagents and plastic equipment means his hospital must send some samples to third-party labs.
"If we can’t get the reagents, we can’t get the consumables – and we still can’t – then it’s really not good to penalize labs for doing the best job they can," Godbey said. "The pathologists, the labs themselves, don’t control the supply chain. We’re going to be penalized for that."
Testing demand has fluctuated throughout the pandemic. The Centers for Disease Control and Prevention initially delivered flawed tests to state and local public health labs, and federal regulators were slow to authorize commercial labs to fill the nation's testing void.
In mid-April, Medicare offered a sweetener for labs to increase testing output, offering $100 for each “high-throughput” test. The payment increase was meant as an incentive to get labs to employ machines that can quickly process a high volume of tests.
Labs could collect the $100 per test run on high-throughout machines no matter how long it took to complete tests and reports results to doctors and consumers.
Under the new policy, Medicare will pay $75 for each test on a high-throughput machine. Labs that complete tests within two days will get a $25 per-test bonus. However, only labs with two-day turnarounds for a majority of COVID-19 tests performed over the previous 30 days are eligible for the bonus.
CMS Administrator Seema Verma said in a statement the new policy supports quick testing, "which will allow patients and physicians to act quickly and decisively with respect to treatment decisions, physical isolation, and contact tracing."
As states relaxed social distancing requirements and allowed more people outside, cases and testing demand again spiked in July. Major commercial labs took one week or longer to process tests, prompting some to prioritize hospital and nursing home patients and health care workers.
With more than 373,000 new U.S. cases in the past week – a rate not seen since July – demand for testing is once again surging. Labs completed an average of more than one million daily tests this past week, according to data from the COVID Tracking Project.
Dr. Anthony Fauci, the nation's top infectious disease expert, warned this week of a resurgence of cases in Northwest, Midwest and other northern states as the weather cools.
Rapid antigen tests that don't require a lab and can produce results in 15 minutes might provide another option for consumers and doctors. The rapid tests are less sensitive than lab-based molecular PCR tests, which remain the gold standard in testing to detect the coronavirus that causes COVID-19.
The U.S.Department of Health and Human Services purchased and sent rapid antigen testing instruments to nearly 14,000 nursing homes nationwide as part of a strategy to protect vulnerable seniors.
Ken Alltucker is on Twitter as @kalltucker or can be emailed at firstname.lastname@example.org
This article originally appeared on USA TODAY: COVID testing: Medicare to cut payments to labs with slow turnaround