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CMS Allows Pharmacies and Other Suppliers to Bill Medicare for COVID-19 Testing

In an effort to address the need to increase the availability of COVID-19 testing, the Centers for Medicare & Medicaid Services (CMS) has issued guidance notifying pharmacies and other Medicare-enrolled suppliers that they may temporarily enroll as independent clinical diagnostic laboratories during the COVID-19 public health emergency (PHE) so that they may bill Medicare for COVID-19 testing. 

Medicare-enrolled pharmacies and other suppliers can take advantage of the expedited temporary enrollment process discussed in a previous post.  The pharmacy or other supplier need only call a hotline number and provide limited information to receive temporary billing privileges.  A pharmacy or other supplier that is not already enrolled must go through the usual process and submit the CMS-855B application to enroll as an independent clinical diagnostic laboratory to the Medicare Administrative Contractor (MAC) that serves its geographic area.

Because CMS’s waiver authority under Section 1135 of the Social Security Act does not allow it to waive the requirements of the Clinical Laboratory Improvement Amendments (CLIA) program during a PHE, any pharmacy or other supplier seeking to bill Medicare for COVID-19 testing must also apply for a CLIA certificate.  If the pharmacy or other supplier seeks to provide only COVID-19 point of care testing, it need only obtain a CLIA Certificate of Waiver to provide point-of-care COVID-19 testing, which, according to the Food and Drug Administration, qualifies as CLIA-waived.  To perform other types of COVID-19 testing, as well as serology testing for the detection of SARS-CoV-2 antibodies, a laboratory must obtain a CLIA certificate of compliance or a CLIA certificate of accreditation to perform high complexity testing, which imposes many more regulatory requirements than a certificate of waiver.

While CMS has made efforts to remove barriers to increased COVID-19 testing, hurdles to the expansion of COVID-19 testing through pharmacies still exist.  As discussed in a previous post, CMS has relaxed Medicare and Medicaid coverage requirements to allow reimbursement for COVID-19 testing ordered by pharmacists, but in many jurisdictions, pharmacists do not have the authority to order or administer laboratory testing absent state action, such as that taken in California.  Further, while large pharmacy chains might have the infrastructure necessary to bill Medicare and other third party payors for COVID-19 testing, purchase testing equipment and supplies, and operate a CLIA laboratory, independent pharmacies and small chains may have difficulty doing so.  It seems more likely that, at least in the near term, pharmacies will continue to collect specimens (which does not require Medicare enrollment or a CLIA certificate) and partner with independent laboratories for the performance of COVID-19 testing.

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Karen S. Lovitch

Chair, Health Law Practice & Co-Chair, Health Care Enforcement Defense Practice

Karen advises industry clients on regulatory, transactional, operational, and enforcement matters. She has deep experience handling FCA investigations and qui tam litigation for laboratories and diagnostics companies.
Jane Haviland's practice focuses primarily on health care enforcement defense. Jane defends laboratories, physicians, and other clients facing government investigations and whistleblower complaints regarding alleged violations of the federal False Claims Act, the federal anti-kickback statute, the Stark law, and similar state laws.