Historic $2 Trillion Stimulus Bill Will Have Major Impact on Labs

Publication Date: Mar 27, 2020

President Donald Trump today signed a massive $2 trillion stimulus package. The bill, known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, along with prior stimulus packages, include several significant policy changes for the laboratory community.

One significant provision in the measure is that it clarifies insurance coverage of COVID-19 diagnostic tests. The bill requires those payers that had established a payment rate prior to the declaration of the public health emergency should continue paying at that rate. However, if the payer does not have established payment rate in effect at that point, payers shall reimburse COVID-19 diagnostics at either the provider’s cash price (as listed on a public internet site), or it may negotiate a lower rate. Alex Azar II, MD, Secretary of Health and Human Services, on January 31, 2020 declared a public health emergency in response to the evolving COVID-19 pandemic.

In addition, the measure provides laboratories a reprieve on expected cuts to the Medicare Clinical Laboratory Fee Schedule (CLFS). The bill freezes CLFS payment rates for 2021, which due to cuts imposed by the Protecting Access to Medicare Act (PAMA, Sec, 216), could have cut payment rates, depending on the test, as much as 15 percent for the year. In addition, the stimulus package extends a current one-year extension on the data reporting requirement from the Protecting Access to Medicare Act (PAMA, Sec, 216). The measure also suspends a reoccurring annual 2-percent cut that applies to the CLFS and other Medicare fee schedules.

One hundred billion dollars in direct financial support would be provided to hospitals, physician practices and other healthcare providers under the Public Health and Social Services Emergency Fund. These funds will help provide for the costs of treating COVID-19 patients, as well as ease the financial impact on those who lose revenue due reductions in other services as a result of the pandemic. The supplemental also funds a new loan product within the Small Business Administration for loans of up to $10 million to help cover payroll and overhead costs, with expanded loan forgiveness criteria. Physician practices with not more than 500 employees may qualify.

The stimulus effort includes significant funding for federal agencies to support their efforts to respond to the COVID-19 pandemic. The Centers for Disease Control and Prevention (CDC) would receive $4.3 billion public health preparedness and response. A portion of these funds would support enhanced nationwide surveillance, diagnostics, laboratory support, communication campaigns to the public, guidance to physicians and health care workers, and global health preparedness. The National Institutes of Health (NIH) would get $945.5 million for COVID-19 vaccine, therapeutic and diagnostic research. Added to funding NIH received as part of the first supplemental spending bill means that the Agency has received almost $1.8 billion to support research.

The Department of Defense’s Defense Health Program –Diagnostics would receive $415 million for the development of vaccines, anti-virals, 24/7 lab operations and the procurement of diagnostic tests. Finally, the National Institute of Standards and Technology would receive $6 million, partly to support research and measurement science activities to improve coronavirus testing capabilities and support development of coronavirus diagnostics.

The CARES Act was approved by the Senate unanimously (96-0). The House of Representatives approved the measure by voice vote.

Other articles in the March 2020 Special ePolicy News:

• ASCP, Lab Community Secure Regulatory Flexibility to Allow Remote Pathology Services
• Historic $2 Trillion Stimulus Bill Approved, Big Impact on Labs

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For more information regarding ASCP's advocacy initiatives and policy positions, please contact ASCP's Center for Public Policy at (202) 408-1110.

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