In late February, the Centers for Medicare and Medicaid Services (CMS) issued additional guidance making it easier for patients to obtain diagnostic COVID-19 testing and clarifying when health plans must cover such testing for enrollees.

The California Department of Managed Health Care (DMHC) today published a new “all plan letter” (APL 21-011) detailing how the new federal guidance affects its emergency regulations on COVID-19 testing.

According to the APL, DMHC-regulated plans are required to pay for COVID-19 testing without any prior authorization requirements, without regard for whether the testing provider was in or out of network, and without any cost sharing to the patient. Whether a patient is essential vs. not essential as defined in DMHC’s emergency regulations is no longer relevant—except in the case of non-grandfathered products that are not subject to the federal guidance.

While the new federal guidance states plans are not required to cover testing for public health surveillance or employment purposes, if a plan does deny coverage of testing for these reasons, the APL states that the plan must have a specific reason for believing it was done for public health surveillance or employment purposes. The fact that the testing as done at a school or employment location is not a sufficient reason for denial.

This new guidance is a welcome improvement from DMHC’s emergency regulations, which created barriers to COVID-19 testing and confusion about whether the test would be a covered benefit.