With Federal Funding Fragmented, States Develop COVID-19 Testing Programs for the Uninsured

As states loosen restrictions on stay-at-home orders, many are struggling to establish clear and consistent COVID-19 testing protocols to support individuals’ safe return to work and school and identify ways to pay for increased testing. Absent federal guidance, there is significant debate about who is responsible for funding testing – insurers argue a test must be medically necessary and employers already hard hit by shutdowns contend that paying for testing is a public health obligation.

Multiple federal programs have recently emerged that fund testing, but to date, they primarily cover only the uninsured and there is no clear roadmap for how these fragmented funding streams interrelate and how states should respond. One small piece of the solution appears to rest in state Medicaid programs.

Under the Families First Coronavirus Response Act (FFCRA), states can enroll qualifying uninsured individuals in a new Medicaid eligibility category that covers diagnostic testing and testing-related services, as well as antibody tests. The option is available from March 18, 2020 (when the law was enacted) through the end of the public health emergency period, and states that have chosen this option receive a 100 percent funding match for the new group.

While there is no income limit for individuals to be eligible for the new Medicaid COVID-19 testing group, individuals must meet other qualifying criteria:

• Individuals must be uninsured – not enrolled in private market coverage or in other federal health programs such as Medicare or a mandatory Medicaid eligibility group, with the following stipulations:
  • Individuals who are enrolled in short-term limited duration plans are considered to be uninsured for purposes of eligibility for this new group.
  • Individuals who live in states that have not implemented the Affordable Care Act’s (ACA) Medicaid expansion but who would have been eligible for the ACA expansion group are eligible for coverage through the COVID-19 testing group if they have no other health coverage.
  • Individuals who are enrolled in Medicaid coverage that offers a limited benefit package (e.g., coverage for tuberculosis, family planning-only services, or individuals who qualify as medically needy) are also eligible for the new Medicaid coverage option.
• Individuals must be state residents, provide proof of US citizenship or of a qualifying immigration status, and a Social Security number.

With limited federal guidance available initially – until recent guidance was issued earlier this month – states that chose to implement the option had to take the initiative in determining how to operationalize their enrollment processes for the new eligibility group. States have taken different implementation approaches, depending on the structure of their eligibility determination systems and procedures.

How States Are Implementing the New Medicaid Option

Connecticut opted to build off of its existing eligibility determination processes, and the state now conducts a full assessment of Medicaid eligibility of uninsured individuals seeking coverage for COVID-19 testing. Individuals apply through the state’s Access Health CT portal, which allows for a real-time eligibility determination. While using the complete eligibility determination process results in individuals who are potentially eligible for the COVID-19 testing group receiving notices indicating they are ineligible for Medicaid, the state has developed tailored messaging that informs these individuals that they will be assessed for eligibility for the COVID-19 testing group. State agency staff then use a manual process to evaluate whether these individuals qualify for the testing group. The state also looked back at applications filed since March 18 to identify other potentially eligible individuals and enroll them in the option. Despite requiring additional staff work, this manual part of the process has been fairly manageable because current enrollment is relatively low — about 600 individuals have been enrolled into the new group since the launch of the initiative in early May. In addition to information on the state’s website, state officials have actively publicized the option through provider bulletins, press releases, and outreach to a wide range of stakeholders.

In anticipation of a potential influx of applicants, New Mexico chose to assign the applications for the testing group to a separate unit of eligibility determination workers to prevent regular Medicaid application offices from becoming overburdened. The state created a simplified application for individuals applying for the COVID-19 testing group, and has also developed a memo outlining how providers can bill Medicaid for eligible individuals. To help expedite the establishment of the program, the state chose to use an existing eligibility category code that was already programmed into the state’s system. During the current initial implementation phase, most of the applications have been paper-based. State officials are in the process of developing a mobile-enabled online application to allow individuals to fill out the form on their phones when they are waiting in their cars at testing sites.

In Utah, state officials report they are developing a hybrid eligibility determination process for the new group that will allow for both paper-based and online applications. When the coverage option launched on June 1, 2020, the state  began accepting applications through its presumptive eligibility portal tool, which allows for a simplified and streamlined process and a full Medicaid eligibility determination. Individuals will also soon have the option to use a simplified paper application to apply, and the state also identifies potentially eligible individuals from its general pool of denied Medicaid applications. Utah officials are in the process of working with testing sites to enable automatic loading of multiple applications simultaneously into the state’s system. Also, like New Mexico, the state is developing ways for individuals to easily apply for coverage in real time when they are at testing locations.

Multiple, Uncoordinated  Sources of Federal Funds Support Testing for Uninsured

A complicating factor for states deciding whether to implement the new Medicaid coverage group is that there are other pools of federal funding for COVID-19 testing, but it is unclear how they are all intended to interact. The COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing and Treatment of the Uninsured Program reimburses providers for COVID-19 testing and treatment claims for uninsured individuals starting on Feb. 4, 2020. Specifically, the program’s FFCRA relief fund contains $2 billion for provider reimbursement for COVID-19 testing of uninsured individuals. Providers are able to submit claims through a portal managed by the Health Resources and Services Administration (HRSA) in order to receive reimbursement equal to Medicare rates. Unlike the Medicaid option, proof of citizenship or a qualifying immigration status is not required. Additionally, the Paycheck Protection Program and Health Care Enhancement Act also established a $25 billion COVID-19 testing fund, of which $1 billion must be used to cover COVID-19 testing for uninsured individuals (this $1 billion was added to the FFCRA Relief Fund, bringing the total of that fund to $2 billion).

Some states have opted not to implement the Medicaid COVID-19 testing group — including Washington State, which already has an approved state plan amendment to do so — because of the availability of reimbursement through the HRSA-administered fund, as well as anticipated operational challenges involved with implementing the Medicaid option. Some of these issues are related to potentially needing to make complex systems changes or complications with the application process, such as obtaining third-party signatures or conducting manual entry of applicants’ data. Another barrier is the potential additional burden on eligibility determination workers overall, who already may be managing a greater number of applications in states where Medicaid enrollment is beginning to increase.

Another consideration for states deciding whether to take up the Medicaid coverage option is that it is unclear how long the HRSA-administered funding will last. This concern about the finite funding through the HRSA portal is cited on Utah’s state webpage as one of the key reasons the state chose to implement the Medicaid testing eligibility group. Other states, such as Connecticut, began efforts to implement the Medicaid coverage option prior to the availability of the HRSA funds. In New Mexico, officials indicated they are not prescriptive in instructing providers how to submit claims for COVID-19 testing and recognize that providers may choose to utilize the HRSA reimbursement process instead of the Medicaid coverage option, particularly because some of the HRSA funding also covers the cost of COVID-19 treatment.

Currently, some states that have implemented the new Medicaid eligibility group are weighing whether to invest more resources to automate enrollment processes for these applicants, but may be hesitant to do so because the coverage category is temporary. While this new Medicaid eligibility group will no longer exist after the end of the public health emergency period, the need for COVID-19 testing of uninsured individuals will remain a pressing issue for the foreseeable future. State officials continue to emphasize the need for greater federal-level recognition and support of states’ testing needs, including testing of asymptomatic individuals, beyond the emergency period and across all health coverage programs.

Key Federal Funding Sources for COVID-19 Testing and Treatment
Families First Coronavirus Response Act (FFCRA) Enacted 3/18/20
New optional Medicaid eligibility group provides coverage of COVID-19 testing for uninsured individuals	States receive 100% federal medical assistance percentage (FMAP) for testing and testing-related services for enrolled individuals and related administrative costs
FFCRA Relief Fund	$1 billion to reimburse providers for testing and testing-related services for uninsured individuals
Coronavirus Aid, Relief, and Economic Security (CARES) Act Enacted 3/27/20
Provider Relief Fund	$100 billion, primarily to compensate providers for lost patient revenue, but an unspecified amount of the fund is available to reimburse providers for COVID-19 treatment
Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA) Enacted 4/24/20
Additional funding for Provider Relief Fund	$75 billion in additional funding, bringing Provider Relief Fund to $175 billion
Funding for COVID-19 testing	$25 billion – $11 billion for state, local, and tribal governments and $1 billion added to FFCRA Relief Fund to cover testing for uninsured individuals