Commercial labs push for piece of $100B coronavirus relief

Dive Brief:

The American Clinical Laboratory Association, whose members include Quest Diagnostics and LabCorp, is asking the Department of Health and Human Services to immediately begin accepting applications from commercial labs for a $100 billion fund created under the Coronavirus Aid, Relief, and Economic Security Act.
ACLA said in an April 2 letter to HHS Secretary Alex Azar its members have performed nearly 1 million tests since early March and are entitled to financial relief from the Public Health and Social Services Emergency Fund for “healthcare related expenses or lost revenues that are attributable to coronavirus.”
Congress appropriated $100 billion as part of the CARES Act for “eligible healthcare providers” such as hospitals. However, it is not yet clear how this fund will be administered and on Friday HHS said some of it will be used to help cover care for the uninsured.

Dive Insight:

For weeks, ACLA has been sounding the alarm that its member labs will not be able to make necessary investments to meet the country’s growing demand for COVID-19 testing without financial support from the U.S. government.

While drafts of the CARES Act were still being debated in late March, ACLA asked Congress for a $5 billion emergency laboratory surge capacity fund to ensure the industry has the equipment, supplies, staffing and resources required to "sustain robust testing capacity for millions of Americans."

That legislative appeal apparently fell on deaf congressional ears. Now, ACLA is waving a tin cup on behalf of its membership in the hope that commercial labs can tap into the $100 billion Public Health and Social Services Emergency Fund.

“Increasing costs of testing components, such as specimen collection swabs, reagents, and personal protective equipment, combined with a decrease in revenues for routine lab services, have made it increasingly difficult to achieve the critical public health goal of developing and performing tens of thousands of COVID-19 tests each day," wrote ACLA’s President Julie Khani to HHS Secretary Alex Azar late last week.

Quest also last week warned that while it “exited March with testing capacity in excess of 30,000 COVID-19 tests a day” the coronavirus crisis is “fluid and unpredictable” and that “future changes in demand for COVID-19 testing could alter our ability to provide testing and report results.”

Khani urged HHS to make CARES Act funding immediately available to commercial labs for uncompensated coronavirus testing services, capital and supplies acquisition, and lost revenues due to lower test volume “as a result of social distancing and a decrease in routine physician visits and surgeries.”

On paper, all healthcare “entities” that provide care, diagnoses or testing for coronavirus are eligible for financial support from the fund. In addition, all non-reimbursable expenses or lost revenues attributable to the public health emergency resulting from COVID-19 qualify for funding.

Nonetheless, Khani acknowledged to MedTech Dive that the funding is not specifically "designated for labs to support expanded COVID-19 testing" and "with so much demand from all corners of a reeling healthcare system, there is no guarantee that labs will receive the support we need."

Under the law, applications must include a statement justifying the financial need. The agency is supposed to make payments on a rolling basis as qualified applications are received. However, HHS has yet to release guidance on the application process.

On Friday, a congressional delegation sent a letter to Azar calling for swift HHS implementation of the $100 billion fund, including “simple, clear guidance” for hospitals and health systems on “how to apply for this funding as quickly as possible.” There was no mention of commercial labs in the letter.

Still, Miranda Franco, a senior policy advisor in the Washington, D.C. office of law firm Holland & Knight, contends labs may be able to garner some of the funding. "The Secretary of HHS has broad discretion in distributing the $100 billion in emergency reimbursements, and guidance has yet to be released."