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Medicare Makes It Easier for Pharmacies to Run Covid-19 Tests

May 11, 2020, 8:33 PM

Pharmacies and other suppliers can bill Medicare for running Covid-19 tests in a temporary move by the nation’s largest payer to ramp up testing.

The Centers for Medicare & Medicaid Services has released a document detailing how pharmacies and other suppliers can apply for waivers that will let them temporarily enroll as independent clinical diagnostic laboratories, which are regulated by the agency.

The ability for pharmacists to seek Medicare reimbursement for Covid-19 tests overcomes a critical hurdle to offering those tests in more convenient locations such as drug stores, said Michael E. Klepser, who helped develop a program to provide more testing services at community pharmacies.

“Up until this point in time, most pharmacies could only offer this as a cash service because they were not considered providers through CMS, and really a lot of the third party payers really didn’t have an interest in a fee-for-service type model,” Klepser, a pharmacy professor at Ferris State University, said Monday in an interview. It was a struggle to ramp up testing when patients have to pay out of pocket, especially if they were on fixed incomes, he said.

“The fact that CMS is saying we’re now authorizing or allowing pharmacists to get reimbursed for these is a great door opening at the federal level and that’s a huge, huge thing,” Klepser said.

CVS, Walgreens, and other pharmacies already are offering up drive-through testing, which collects nasal swab samples from eligible patients and sends them off to a laboratory to run the results. The waivers will allow those pharmacies to provide the same tests being done in doctors’ offices.

Eligible pharmacies and their suppliers must be enrolled in the Medicare program and receive a certificate of waiver from the rigorous laboratory standards under the Clinical Laboratory Improvement Act (CLIA). The waiver allows pharmacies to run simple laboratory exams and procedures that don’t have to meet the CLIA standards.

“Pharmacists can become a CLIA-waived laboratory essentially by filling out two pages of paperwork and submitting $150 every two years to CMS,” Klepser said.

More than 10,000 pharmacies already have the necessary waivers, Klepser wrote in a paper.

Billing Enabled

With the waiver, pharmacies can perform diagnostics for Covid-19 that have an emergency use authorization, as the Food and Drug Administration explained in a recent clarification. Those include Abbott’s five-minute test.

Historically, pharmacies couldn’t bill for such tests because their contracts with health insurance only involves the drug side of coverage, whereas laboratory tests go through medical services, Klepser said.

More than 90% of Americans live within a mile and a half of a pharmacy, and there are about 13 billion pharmacy visits a year compared to 470 million annual physician office visits, Klepser said. “They have such a broad footprint in the United States,” he said.

“They have expanded hours compared to physician offices, and in a lot of rural areas there may not be a physician in the town, but there’s likely a pharmacy close by,” Klepser said.

To contact the reporter on this story: Jeannie Baumann in Washington at jbaumann@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com

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