The Families First Coronavirus Response Act (“FFCRA”), which was enacted in March of 2020, requires insurers to provide benefits without imposing any cost-sharing in connection with certain items and services related to the testing and treatment for COVID-19.  Curiously, the legislation is silent as to the concept that is well-known in the healthcare industry today as “medical necessity”. Although the FFCRA and subsequent COVID-19 related legislation did not explicitly require medical necessity for diagnostic testing, administrative guidance makes it clear that medical necessity is a prerequisite in order to properly obtain reimbursement. This concept directly impacts healthcare professionals and their businesses as although payers may have initially paid large amounts of claims in full, those same payers now have the ability to recoup such payments in the event that a post-payment audit results in an overpayment finding.

Understandably, in an attempt to prevent the rapid spread of COVID-19, many healthcare businesses quickly pivoted and devoted a large portion of time and resources to providing diagnostic testing and treatment services for COVID-19. The influence from the government, as well as the media, at the onset of the pandemic was to test as many people as possible, as quickly as possible. However, now that the public health emergency has evolved and is purportedly “winding down,” it is inevitable that enforcement actions are going to ramp up, and various payers are going to begin auditing claims associated with COVID-19 services, particularly with respect to whether medical necessity was established for the large volume of diagnostic tests that have been and will continue to be administered and reimbursed by various payers.  Similarly, the Department of Justice has announced that it is ramping up COVID-19 related enforcement through its establishment of the COVID-19 Fraud Enforcement Task Force.

Thus, it is imperative that all healthcare professionals understand the importance of medical necessity as it relates to COVID-19 testing in order to evaluate historical claims to identify potential overpayments, as well as to ensure that claims for reimbursement going forward are properly supported. Our firm can assist with evaluating these issues and recommending best practices to ensure that your business has sufficient policies and procedures in place that comply with the medical necessity requirements.

Accordingly, please contact the attorneys at Nicholson & Eastin today if you have any questions or concerns relating to the concept of medical necessity and its application to COVID-19 related services.