Insurance Circular Letter No. 3 (2022)
February 25, 2022
All Insurers Authorized to Write Accident and Health Insurance in New York State, Article 43 Corporations, Health Maintenance Organizations, Student Health Plans Certified Pursuant to Insurance Law § 1124, Municipal Cooperative Health Benefit Plans, and Prepaid Health Services Plans
Coverage for COVID-19 Testing
STATUTORY AND REGULATORY REFERENCES: N.Y. Insurance Law §§ 3221 and 4303 and 11 NYCRR 52 (Insurance Regulation 62); Families First Coronavirus Response Act (“FFCRA”); Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”)
The purpose of this circular letter is to advise insurers authorized to write accident and health insurance in this state, Article 43 corporations, health maintenance organizations, student health plans certified pursuant to Insurance Law § 1124, municipal cooperative health benefit plans, and prepaid health services plans (collectively, “issuers”) of their responsibilities to provide coverage for COVID-19 tests. This circular letter applies to commercial health insurance written by such issuers. This circular letter does not apply to Child Health Plus, Essential Plan, and Medicaid managed care coverage. This circular letter repeals and replaces Insurance Circular Letter No. 11 (2020).
II. Coverage for COVID-19 Testing under New York Law
Issuers are reminded that diagnostic testing, including laboratory tests, is an essential health benefit, which must be covered under individual and small group comprehensive health insurance policies and contracts. Insurance Law §§ 3221(l)(3) and 4303(e) and (f) require issuers of large group comprehensive health insurance policies and contracts to make available coverage for laboratory tests, and such tests are typically covered in the base policy or contract.
In addition, issuers are reminded that the 57th Amendment to 11 NYCRR 52 (Insurance Regulation 62), first promulgated on March 13, 2020, prohibits the imposition of copayments, coinsurance, or annual deductibles (“cost-sharing”) for in-network laboratory tests and visits to diagnose COVID-19 at the following locations, including through telehealth: an in-network provider’s office, an in-network urgent care center, any other in-network outpatient provider setting able to diagnose COVID-19, or an emergency department of a hospital. An issuer may impose cost-sharing in accordance with the applicable policy or contract for any follow-up care or treatment for COVID-19, including an inpatient hospital admission, as otherwise permitted by law.
III. Coverage for COVID-19 Testing under Federal Law
Section 3202 of the CARES Act requires an issuer providing coverage of items and services described in § 6001(a) of division F of the FFCRA, codified as Public Law 116–127, to reimburse a health care provider who renders diagnostic testing for COVID-19. Under § 3202, if the issuer has a negotiated rate with the provider in effect before the public health emergency declared under 42 U.S.C. § 247d, then the negotiated rate will apply throughout the period of the declaration. If the issuer does not have a negotiated rate with the provider, then the issuer must reimburse the provider in an amount that equals the cash price for the service as listed by the provider on a public internet website, or the issuer may negotiate a rate with the provider for less than the cash price. The requirement for the issuer to reimburse the provider in the absence of a negotiated rate exists throughout the period of the public health emergency declared under 42 U.S.C. § 247d, regardless of whether the applicable policy or contract covers out-of-network benefits.
In addition, guidance issued on April 11, 2020 jointly by the U.S. Departments of Labor, Health and Human Services, and the Treasury (the “federal Departments”) states that “Section 6001(a) of the FFCRA provides that plans and issuers shall not impose any cost-sharing requirements (including deductibles, copayments, and coinsurance), prior authorization requirements, or other medical management requirements for” items and services that must be provided under § 6001(a) of the FFCRA, as amended by § 3201 of the CARES Act, throughout the period of the declaration. The guidance further states that “[t]hese items and services must be covered without cost-sharing when medically appropriate for the individual, as determined by the individual’s attending healthcare provider in accordance with accepted standards of current medical practice.” The guidance defines an “attending provider” as “an individual who is licensed under applicable state law, who is acting within the scope of the provider’s license, and who is directly responsible for providing care to a patient.”
On February 26, 2021, the federal Departments issued additional guidance, which provides, in relevant part, that the FFCRA prohibits issuers from: (1) imposing medical management, including specific medical screening criteria, on coverage of COVID-19 diagnostic testing; and (2) requiring the presence of symptoms or a recent known or suspected exposure, or otherwise imposing medical screening criteria on coverage of COVID-19 diagnostic tests. Further, the guidance clarifies that when an individual receives a COVID-19 diagnostic test from a licensed or authorized health care provider, or when a licensed or authorized health care provider refers an individual for a COVID-19 diagnostic test, an issuer generally must assume that the receipt of the test reflects an “individualized clinical assessment” and the issuer should cover the test without cost-sharing, prior authorization, or other medical management requirements. The guidance also provides that issuers are permitted, but are not required, to provide coverage of testing for public health surveillance or employment purposes. The guidance further sets forth that issuers are encouraged to ensure that communications about the circumstances in which testing is covered are clear.
On January 10, 2022, the federal Departments issued guidance to clarify that insureds who purchase over-the-counter (“OTC”) COVID-19 tests on or after January 15, 2022 may seek reimbursement from their issuers during the public health emergency declared under 42 U.S.C. § 247d. The guidance states that issuers must cover OTC COVID-19 tests with or without an order or individualized assessment by an attending health care provider. To comply with the guidance, issuers must provide coverage for OTC COVID-19 tests through both their pharmacy network and direct-to-consumer shipping programs. Issuers may limit reimbursement for OTC COVID-19 tests from non-preferred pharmacies or other retailers to no less than the actual price or $12 per test, whichever is lower. In addition, issuers may, but are not required to, limit the number of OTC COVID-19 tests covered for each insured to no less than eight tests per 30-day period (or per calendar month). In response to industry questions, the federal Departments issued additional guidance on February 4, 2022 to further clarify requirements for coverage. The Department of Financial Services expects issuers to reimburse insureds and provide the necessary education, information, and consumer support to access and use OTC COVID-19 tests in accordance with the federal guidance.
Based on state and federal law, issuers must provide coverage for non-OTC COVID-19 testing performed for individualized diagnosis or treatment of COVID-19. Issuers must provide coverage for such testing without imposing any cost-sharing requirements (including deductibles, copayments, and coinsurance), prior authorization, or other medical management. Issuers must also provide coverage for OTC COVID-19 tests consistent with the guidance discussed above. While issuers are not required to provide coverage of testing (including OTC COVID-19 tests) for public health surveillance or employment purposes, issuers may provide coverage for such tests. Issuers should be clear in communications to insureds about the circumstances in which testing is covered.
Please direct any questions regarding this circular letter by email to [email protected].
Very truly yours,
 Under § 6001(a) of the FFCRA, items and services include: (1) in vitro diagnostic products for the detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19 that are approved, cleared, or authorized under section 510(k), 513, 515 or 564 of the Federal Food, Drug, and Cosmetic Act, and the administration of such in vitro diagnostic products; and (2) items and services furnished to an individual during health care provider office visits (which includes in-person visits and telehealth visits), urgent care center visits, and emergency room visits that result in an order for or administration of an in vitro diagnostic product, but only to the extent such items and services relate to the furnishing or administration of such product or to the evaluation of such individual for purposes of determining the need of such individual for such product.