Insurers May Only Pay For Coronavirus Tests When They're 'Medically Necessary'

In the wake of the massive turnout at anti-racism demonstrations around the country, public health officials are encouraging protesters to get tested for the coronavirus. As purely precautionary testing has become more common, some insurance companies are arguing they can't just pay for everyone who's concerned about their risk to get tested.

Lynne Cushing of Nashville, Tenn., says she had been pretty strict about social distancing until the recent protests, which she felt compelled to attend.

"I had hoped to kind of stay on the edge or the periphery a little bit," she says. "But I didn't think about the fact that everyone's going to be chanting. There's going to be all this forced air coming out of people at the demonstration."

So a few days after marching in her mask, she went to a curbside clinic for a COVID-19 test. Cushing knew health plans had to cover the test and can't even charge a co-pay.

"Because I have health insurance, I'm lucky in that regard," she says.

The Families First Coronavirus Response Act passed by Congress requires health plans to fully pay for testing deemed "medically necessary." But as testing expands enough to allow people without symptoms to be tested, a gray area is beginning to appear.

The coverage mandate can be up to interpretation.

"This is a very live and active debate right now," says health policy research professor Sabrina Corlette of Georgetown University.

"That requirement may only apply if you've been referred for a test by a health care professional after presenting with symptoms of the disease," she says.

The guidance from the Centers for Medicare and Medicaid Services says full coverage is required "when medically appropriate for the individual, as determined by the individual's attending health care provider in accordance with accepted standards of current medical practice."

Health plans have been erring on the side of paying the full cost, though hospitals have reported some self-funded plans trying to impose co-pays and deductibles. But the nation's largest insurer, UnitedHealthcare, makes the same distinction, that full coverage does require a test to be deemed medically necessary.

The concern is that an open-ended commitment to pay for testing would lead to runaway costs for health plans.

"These are some very big numbers that we're looking at," says Kristine Grow, spokesperson for America's Health Insurance Plans.

The tradegroup just funded a study that estimates the cost of all the precautionary testing needed over the next year — both related to the workplace and public health surveillance programs.

What worries health plans is that employers may may start to institute testing requirements for everyone returning to work. AHIP projects it could cost health plans $25 billion a year if the government doesn't step in to defray the cost. And testing for antibodies could approach $19 billion.

Health plans also anticipate a rise in opportunistic providers that could be offering fraudulent or unproven tests, including for coronavirus antibodies.

"That's why we think it's very important to approach testing with a very strategic approach, one that's based on science, and has very clear direction on who gets tested, how often, what that test result means, how we take action and where the funding comes from," Grow says.

The Equal Employment Opportunity Commission has issued guidance saying employers can legally require testing. Still, most businesses aren't taking their coronavirus precautions that far. Employment attorneys say they're settling for temperature checks and questionnaires about symptoms and exposures.

But at least one industry is already staring down this dilemma of who pays — long-term care. Nursing home staffers in many states are required to be tested every week. In New York, it's twice a week, and health plans are beginning to balk.

One-time testing wouldn't be that big of an expense, though even that would add up across hundreds of employees at roughly $100 per test.

"It also adds up for the number of times," says Christine Thelen, a lawyer with the firm Lane Powell in Portland who represents nursing home companies. "You take a COVID-19 test today, but that doesn't mean that three days from now I don't test positive, because it's a point-in-time test."

Still, Thelen says she's advising clients that no worker should be asked to pay their own way.

"I think employers need to pay for it," she says.

Public health researchers emphasize the importance of regularly testing nursing home residents and employees, as well as other asymptomatic, but high-risk people, and making testing available to people who may have been exposed at events like protests. This can help catch undetected disease and stop it from spreading in a community.

Many cities are offering to fund the precautionary tests for people who've attended protests. Still these free tests aren't available everywhere and since most states are not yet paying for testing (though Tennessee is) many people are left relying on their private insurance.

Lynne Cushing was right to be worried. She tested positive after the march she attended, though she says she knew the risk and considered it worth taking

"I don't regret it," she says.

She never developed symptoms, and her health plan seems to have covered the full cost.

But the friends she marched with also decided they needed to get tested. And thousands more were encouraged to do the same. And that same situation is playing out in dozens of cities across the country.

This story is part of a reporting partnership that includes WPLN, NPR and Kaiser Health News.

Editor's note: The radio version of this story incorrectly said Lynne Cushing got tested the next day after the march. In fact, she was tested a few days after the protest to account for the incubation period.

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