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Legislation Would Provide Medicare Coverage for Pharmacy-Based Testing


NEW YORK — Recently introduced federal legislation would provide Medicare coverage for a variety of pharmacy services including diagnostic testing.

Called the Equitable Community Access to Pharmacist Services Act, the bill would establish Medicare Part B coverage for pharmacy testing for diseases including COVID-19, flu, respiratory syncytial virus, and strep throat as well as other conditions identified in the future by the Department of Health and Human Services as necessary to close "gaps in health equity."

The bill would also provide Medicare coverage for pharmacy services including treatments and vaccinations for diseases including COVID-19, flu, and strep throat. Pharmacists would be reimbursed for these services at 85 percent of the physician fee schedule.

Beyond providing federal reimbursement for these services, some observers believe the bill, if passed, would spur private payors to expand their reimbursement of pharmacy services like diagnostic testing, further broadening coverage.

A bipartisan group of 11 legislators introduced the bill in the House again in March. This month, a bipartisan group of five Senators introduced a Senate version of the bill called the Pharmacy and Medically Underserved Areas Enhancement Act. That bill would similarly provide Medicare Part B coverage for certain pharmacy services including diagnostic testing, though only in areas designated as medically underserved by HHS.

The legislation would build on a shift toward pharmacy-based testing that has been underway for years and accelerated during the COVID-19 pandemic.

"This would be hugely significant for pharmacy in recognizing some of the non-[drug]-dispensing activities that pharmacists are doing," said Michael Klepser, a professor of pharmacy at Ferris State College of Pharmacy.

Point-of-care testing, primarily for infectious disease, has become a substantial business for pharmacies as they look to revenue sources beyond drug dispensing. According to figures from the American Association for Clinical Chemistry, as of 2021, pharmacies comprised more than 8 percent of the country's CLIA-waived labs, expanding from around 240 in 1995 to more than 26,000 today, second only to physician offices.

Reimbursement for pharmacy-based testing has been limited, though, Klepser said, with much of it paid for by patients out of pocket.

Payor coverage for pharmacy testing "has been a limiting factor, by all means," agreed David Pope, chief pharmacy officer at lab consulting and revenue management firm Xifin.

Rules governing pharmacists' ability to offer testing and prescribe medication based on the test results are largely handled at the state level, with state laws varying widely. During the COVID-19 pandemic, however, the Public Readiness and Emergency Preparedness (PREP) Act gave pharmacies and pharmacists federal authorization to order and administer COVID-19 tests. Given this authority, pharmacies participated prominently in SARS-CoV-2 testing, helping to further solidify their status as diagnostic providers.

Pope said he expects the momentum gained during the pandemic will continue, with states giving pharmacists increased authority for testing.

"There's a groundswell of support [for pharmacy testing] on the state side," he said, "so it's not really a question of can you order those tests. The big question now is who is going to pay for it?"

Versions of the legislation have been introduced in several previous sessions of Congress but have failed to gain traction despite collecting roughly 300 co-sponsors in the House and more than 50 co-sponsors in the Senate. Pope said, though, he believes action on the legislation is more likely this time around.

He noted that under the amended version of the PREP Act currently in place, the federal government still expects pharmacies to play a role in COVID-19 testing through initiatives like the Test to Treat program. However, the end of the Public Health Emergency leaves pharmacists without a guarantee of coverage for this testing. He suggested that this discrepancy presents a problem that the bill would address.

"The federal government is saying on one side that we want pharmacists to test … but to do that, you have to have coverage, and as of right now, Medicare post-PHE doesn't cover the costs for pharmacists to order that test," Pope said.

More generally, Pope said he believes the pandemic has shown the usefulness of pharmacy-based testing, particularly in medically underserved areas, and this could make Congress more likely to act.

Klepser likewise suggested that the fact that "we've seen pharmacies step up and provide these services" during the pandemic could boost the bill's prospects. "It's time to recognize that pharmacies did this in a way that was advantageous to the health system and to patients, and we need to make it a permanent part of their practice and allow them to get paid for it."

"Most pharmacy chains and pharmacies want to offer these services, but they can't do it because often right now they operate at a loss when they offer them," he said.

One challenge for the bill is that it would potentially increase Medicare spending. The Congressional Budget Office has not scored the bill, but in a report commissioned last year by the industry group Future of Pharmacy Coalition — which supports the legislation — consulting firm Avalere Health projected the bill would increase federal spending by $2.2 billion over the 10 years spanning 2023 to 2032.

At an average of around $200 million per year, this would be a relatively small increase by federal budget standards, but it could nonetheless prove a stumbling block given Congress' current debt ceiling focus.

Pope acknowledged that this could prove an issue in the current legislative environment. He argued, though, that improving the Medicare population's access to infectious disease testing could lower the program's spending overall if it cut down on hospitalizations and other negative outcomes.

Pope also suggested that the idea of leveraging pharmacies to improve patient access to testing and other medicine was broadly popular among legislators.

"It's been a bipartisan effort so far, and there's not a lot of pushback that we're seeing from either side," he said.

Klepser, likewise, said he believed the bill has sufficient support, but it remains to be seen if legislators will devote the attention required to pass it.

"It's just a matter of what [may] occur during this legislative session that may distract people from wanting to do this," he said.

While the bill does not affect private payor coverage of pharmacy testing and other services, Klepser noted that private insurers often follow Medicare's lead and suggested that its passage could drive expansion of private coverage, as well.

Medicare coverage might also work to loosen state laws around pharmacy testing by incentivizing pharmacies to put more effort into lobbying state legislators, he suggested.

"You're going to see pharmacists and pharmacy owners in states [where pharmacy-based testing is restricted] say, 'Listen, we can bill for this, we can do it well, let us do it,'" he said.