CMS Launches Free Medicare Coverage of OTC COVID-19 Rapid Antigen Tests

For the first time in its history, the Centers for Medicare & Medicaid Services (CMS) is making over-the-counter (OTC) rapid antigen tests for home use available to Medicare Part B beneficiaries at no cost. Keeping a promise it made back in February, CMS announced on April 4 that from now through the end of the public health emergency (PHE), Medicare will cover 100 percent of the costs of OTC COVID-19 tests. Here’s a briefing of what lab managers need to know about the new policy.

Evolution of Free Medicare OTC Test Coverage

While expanding availability of at-home tests has been a central element of the Biden COVID-19 response strategy from the beginning, this unprecedented coverage policy came about via improvisation rather than deliberate planning. It began last December, when the administration unveiled a new plan requiring private health insurers to cover 100 percent of the cost of at-home COVID-19 tests purchased by their members for as long as the PHE remains in effect. However, the mandate didn’t cover Medicare, which left over 62 million elderly and disabled Americans out in the cold. The omission was made necessary by long established regulations limiting Medicare coverage of rapid antigen and PCR diagnostic tests without a beneficiary’s having to pay anything out of pocket to tests ordered by a physician or other qualified health care provider and performed by a lab. As the very phrase suggests, at-home OTC COVID-19 tests are neither of the above. Moreover, federal laws that define when Medicare can and can’t pay for services and drugs generally exclude payment of items sold over the counter. The other obstacle was the structure of the Medicare program in which payments are made to providers rather than beneficiaries and the lack of a mechanism for Medicare beneficiaries who pay for services and drugs upfront and out of their own pocket to seek reimbursement the way they can under most private health plans. While understandable, the omission of Medicare beneficiaries from the Biden free OTC COVID-19 test policy attracted considerable criticism. On Jan. 24, a group of 19 Senate Democrats wrote a public letter “strongly encouraging” Health and Human Services secretary Xavier Becerra to extend the free coverage policy to Medicare. Current policies leave Medicare beneficiaries “on the hook for potentially significant out-of-pocket costs," the senators wrote. The pushback worked. The administration decided, what the heck, making free OTC tests available to Medicare beneficiaries was worth the headache of rearranging the coverage rules. On Feb. 3, CMS announced that Medicare would cover 100 percent of OTC COVID-19 tests, starting in the spring.

Details of the New OTC COVID-19 Rapid Antigen Test Coverage Policy

Who: Free tests are available to all beneficiaries with Medicare Part B coverage, including Medicare Advantage plan members, in which case the COVID-19 OTC tests will be covered outside of the existing plan’s coverage, and in addition to any OTC tests that may be covered under the plan as a supplemental benefit. The policy doesn’t apply to COVID-19 tests for beneficiaries who have only Medicare Part A (hospital insurance) coverage (although those beneficiaries may be able to get free tests through other programs). What: Part B beneficiaries can get up to eight free OTC rapid COVID-19 antigen tests per month. Those seeking more than the allotted eight tests in any calendar month will have to pay unless they have additional health coverage. Where: Beneficiaries can get the free tests from any pharmacy chain participating in the program, even if they aren’t a current customer or patient. Participating pharmacies include Albertsons Companies, Costco Pharmacy, CVS, Food Lion, Giant Food, The Giant Company, Hannaford Pharmacies, H-E-B Pharmacy, Hy-Vee Pharmacy, Kroger Family of Pharmacies, Rite Aid, Shop and Stop, Walgreens, and Walmart. When: Starting April 4, Medicare beneficiaries can get the eight free tests during the month of April any time before April 30; after that, they can get another set of eight free OTC tests per month for each month the PHE remains in effect. The free test policy doesn’t cover tests purchased before April 4. How: All beneficiaries have to do is request the tests and, in some cases, display their red, white, and blue Medicare card to verify their membership status without paying anything out of pocket. The store will provide the tests and bill Medicare on the beneficiary’s behalf. Beneficiaries need not—and may not—submit their own claim for the free tests to Medicare.