CMA-sponsored law requires payers to cover costs of COVID-19 testing and vaccine management – Community News

CMA-sponsored law requires payers to cover costs of COVID-19 testing and vaccine management

Nov 10, 2021

Ensuring doctors can administer tests and vaccines is critical to putting the COVID-19 pandemic behind us. This is why the California Medical Association (CMA) has sponsored legislation requiring health plans and insurers to cover COVID-19 testing and vaccinations during the pandemic without impediments such as patient-cost sharing or prior approval.

This bill — SB 510, written by Senator Richard Pan, MD — was signed into law and will ensure that all Californians, regardless of race, income or geographic region, can receive vaccinations and tests, which will remain necessary until the end of the pandemic. This bill also implements valuable lessons learned over the course of the pandemic by establishing a framework for preparing for future public health crises so that the state can be prepared for the next outbreak.

The new law will come into effect on January 1, 2022, but will be retroactive to the start of the public health emergency, which was declared on March 4, 2020.

SB 510 requires payers to cover COVID-19 testing and vaccine administration regardless of the carrier’s network status. If the provider would otherwise have been entitled to cost-sharing for the service, the payer must reimburse the physician for the missed cost-sharing amounts.

SB 510 also prohibits payers from shifting the financial risk of COVID-19 testing and vaccine administration to contracted providers unless both parties have negotiated and agreed to a new contractual provision. This is critical as some health plans and insurers have shifted the financial risk of critical COVID-19 diagnostic testing to frontline physicians caring for their patients by reimbursing well below the cost of the test itself.

As such, the bill requires payers to negotiate a payment rate for providers in the network, rather than unilaterally imposing a contracted rate. For non-contracted providers, payers must reimburse COVID-19 testing and vaccine administration at a rate that is reasonable compared to the prevailing market rates in the geographic region where the service is provided. Providers are required to accept this as full payment and patient balance billing is not allowed.

Earlier this year, CMA asked the California Department of Managed Care and the California Department of Insurance to investigate concerns that certain payers were hindering patients’ access to appropriate and necessary COVID-19 testing in violation of state and federal law, and profits at the expense of treating physicians.

SB 510 is critical legislation to ensure barriers to testing and vaccination are kept to a minimum, physicians are protected from bad behavior by health plans, and patients have no out-of-pocket costs for these necessary services.


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