The California Department of Insurance’s COVID-19 Testing and Coverage FAQ # 1

The California Department of Insurance (CDI) recently published frequently asked questions (FAQs) on COVID-19 testing and coverage specifying that health insurers must waive cost-sharing, including deductibles, coinsurance, and copays, for COVID-19 testing and related diagnostic items and services. In addition, coverage of COVID-19 testing and related diagnostic items and services must be provided without imposing prior authorization requirements. These requirements apply regardless of network status of the provider. However, for these requirements to apply, there are some caveats under federal law.

An attending provider must make an individualized assessment to determine whether the test is medically appropriate.
The related items and services must be furnished during a visit that results in an order for, or administration of, a COVID-19 diagnostic test.
Federal law prohibits “balance billing” for the COVID-19 diagnostic test, but not for related items and services; if the related items and services are provided out-of-network, these items and services may be subject to balance billing.

The FAQs also clarify that insurers cannot deduct the cost-sharing that must be waived for COVID-19 diagnostic testing and related items and services out of physician payments. Insurers must reimburse COVID-19 diagnostic testing at the negotiated rate for in-network providers, or the provider’s online cash price for providers with whom the insurer does not have a negotiated rate, without deducting patient cost-sharing. Physicians should contact CDI’s Provider Complaint Center if a health insurer is not paying the appropriate rate for COVID-19 testing and related items and services as required by federal law.

A previous article discussed the Department of Managed Health Care’s (DMHC) regulations on COVID-19 diagnostic testing, which is different from the CDI FAQs. The table below outlines these differences.

	CDI	DMHC
Patient Cost-Sharing	Health insurers must waive cost-sharing, including deductibles, coinsurance, and copays, for COVID-19 testing and related diagnostic items and services if the attending provider determines the test is medically appropriate.	Health plans are only required to waive cost-sharing for individuals who are symptomatic or with known or suspected recent exposure to SARS-CoV-2. For all other individuals, health plans can subject enrollees to any applicable cost-sharing amounts incurred as a result of COVID-19 diagnostic testing.
Prior Authorization or Other Medical Management Requirements	Coverage of COVID-19 testing and related diagnostic items and services must be provided without imposing prior authorization requirements if the attending provider determines the test is medically appropriate.	Health plans may not impose prior authorization or other medical management requirements for individuals who are symptomatic, with known or suspected recent exposure to SARS-CoV-2, or who are essential workers. For all other individuals, health plans can require prior authorization.
Provider Network Status	Insurers must cover COVID-19 diagnostic testing regardless of network status. Federal law prohibits “balance billing” for the COVID-19 diagnostic test, but not for related items and services; if the related items and services are provided out-of-network, these items and services may be subject to balance billing.	Health plans may deny coverage for a COVID-19 test if the enrollee failed to attempt to access a COVID-19 diagnostic test from an in-network provider or failed to contact the health plan to locate an in-network testing provider before accessing a COVID-19 diagnostic test through a non-contracted provider.