Key Questions About the New Medicaid Eligibility Pathway for Uninsured Coronavirus Testing

In response to the need to increase access to testing during the COVID-19 pandemic, recent federal legislation, the Families First Coronavirus Response Act,1 amended by the Coronavirus Aid, Relief, and Economic Security Act,2 creates a new optional Medicaid eligibility pathway, with 100% federal matching funds, for states to cover coronavirus testing and testing-related services for uninsured individuals. This new option is available from March 18, 2020 through the end of the public health emergency period. The HHS Secretary declared COVID-19 a nationwide public health emergency on January 31, 2020, retroactive to January 27, 2020. The public health emergency ends when the Secretary declares that the emergency no longer exists or after 90 days, whichever happens first, although the Secretary can renew the public health emergency declaration for subsequent periods.3 This issue brief answers key questions about how the new eligibility pathway is being implemented, drawing on frequently asked questions issued by the Centers for Medicare and Medicaid Services. A separate issue brief answers key questions about implementation of another new provision of the law, which provides increased federal Medicaid matching funds to help states respond to the COVID-19 emergency.

Who is eligible for the new Medicaid coverage group?

Uninsured individuals are eligible for the new “COVID-19 testing group” without regard to income or assets. Individuals are considered uninsured if they are not enrolled in another federal health care program, such as Medicare or Veterans Administration coverage or a commercial group or individual health plan, except that those enrolled in short-term limited duration plans do qualify as “uninsured” for the new group. The new Medicaid coverage group also excludes people who are eligible for a mandatory Medicaid group, except that those in non-expansion states who would be eligible for the ACA expansion group if their state adopted the expansion do qualify for the new group. (People in non-expansion states with income from 100-138% of the federal poverty level are not eligible for the new group if they are enrolled in Marketplace coverage.) The new group also can include current Medicaid enrollees who receive a limited benefit package based on tuberculosis, family planning only services, or medically needy eligibility. In addition to being “uninsured,” individuals in the new group must be a state resident, provide a Social Security Number, and have a qualifying citizenship or immigration status.

How can states adopt the new group?

States can adopt the new group by completing the Medicaid Disaster Relief State Plan Amendment (SPAs) template, which a few states have done to date. States cannot receive federal funds for the new group until they have an approved SPA, although approvals can be retroactive to March 18, 2020.4 As of April 24, 2020 Arizona, Colorado, Louisiana, and Rhode Island have approved SPAs to cover the new group, and California, Iowa, New Mexico, and West Virginia report that they will cover the new group.

How is eligibility determined for the new group?

States can use a variety of simplified and streamlined policies to process applications and determine eligibility for the new group. Initial application processing for the new group can be done at disproportionate share hospitals (which receive Medicaid funds for serving a large number of Medicaid and uninsured individuals) and federally qualified health centers, and states can adopt a simplified application form. Hospitals can determine individuals presumptively eligible for the new group. States can accept self-attestation of uninsured status to establish eligibility for the new group in lieu of documentation.5

What services are covered in the new group?

The benefit package for the new group is limited to coronavirus testing and testing-related services at no cost-sharing and with 100% federal matching funds. Testing includes diagnostic tests as well as serological tests to detect antibodies.6 Testing-related services include those directly related to the administration of an in vitro diagnostic product or the evaluation of an individual for purposes of determining the need for such a product, such as an X-ray.7 Testing-related services do not include those for treatment of COVID-19 or vaccines.

What remaining challenges might uninsured individuals and states face?

Allowing Medicaid to cover coronavirus testing for the uninsured can help expand access to testing, though individuals may not be aware of this new option and a gap in coverage for treatment services remains for the uninsured. Currently, there are a number of coronavirus test providers that charge an up-front fee to all patients, including those who are uninsured. Examples of posted testing fees in states with high numbers of coronavirus cases to date range from $59 to $229. These fees can be unaffordable for people with low incomes and could prohibit people who are uninsured from obtaining a test. States and providers may face challenges with public education and outreach to individuals who likely do not know that this new coverage option for testing exists during a time in which time and resources are limited.

If an individual eligible for the new group already has incurred an unpaid medical bill for testing, they may be able to have the bill covered under Medicaid’s 90-day retroactive coverage period. However, coverage is only available as of March 18, 2020, so any unpaid testing bills prior to that date do not qualify for provider reimbursement. If an individual already has paid for a test out-of-pocket, even though they would have been eligible for coverage in the new group, they cannot subsequently enroll in the group and be reimbursed, as Medicaid is generally prohibited from reimbursing individuals directly in this way.

While few states have adopted the new optional group to date, states can continue to do so and request that the SPA approval be retroactive to March 18, 2020, using Section 1135 emergency authority, to reimburse providers for outstanding testing bills incurred for uninsured individuals up to 90 days prior to the Medicaid application. Separately, the Families First Coronavirus Response Act authorized $1 billion in federal funds to reimburse providers for coronavirus testing for the uninsured through the National Disaster Medical System outside of Medicaid, though it is not yet clear how the two funding streams will interact.

In addition, HHS recently released guidance detailing how of the CARES Act Relief Fund will be used to reimburse providers for testing as well as treatment services for uninsured COVID-19 patients. Providers receiving these funds cannot balance bill patients. It is not yet clear how much money from the Relief Fund will be used for this purpose.