Medicare $100bn expected to relieve financial burden on providers and incentivize high-throughput coronavirus testing, says GlobalData

Following the announcement that the Health and Human Services (HHS) delivered an initial $30bn in relief funding to Medicare providers and suppliers and doubled its payment rate for high-throughput coronavirus testing;

Dara Lo, Medical Device Analyst at GlobalData, a leading data and analytics company, offers her view:

“This injection of cash is a welcome relief to Medicare providers and patients who were largely shouldering the cost of COVID-19 testing. Even commercial diagnostic leader Quest, which carries out 40% of COVID-19 testing in the US, has seen declining revenue in recent years due to the challenges of increased testing volumes but declining reimbursement, leading to revenue pressures. Medicare financial aid will help with cash flow of testing labs that had to foot the bill of COVID-19 tests waiting for Medicare to kick in.

“Additional financial aid came from the Centers for Medicare and Medicaid Services (CMS), doubling their coverage from $51 to $100 for high-throughput coronavirus tests, which GlobalData expects will incentivize manufacturers to develop additional high-throughput COVID-19 tests and allow for additional testing labs to enter the testing space. Current major market shareholders of high-throughput coronavirus tests include Roche, Abbott, Hologic, Cepheid and Thermo Fisher who were able to take advantage of the fact that their popular platforms were already in diagnostic labs around the country – so when they developed COVID-19 tests, they were able to immediately deploy them.

“While high-throughput tests require more specialized equipment to run, they can process over 200 specimens per day, greatly increasing testing capacity. Despite the ability for high-throughput tests to dramatically increase testing capacity, lack of predictable reimbursement for these more expensive, high-throughput tests was a barrier to entry for some testing labs. With the increase to reimbursement by the CMS, GlobalData expects that high-throughput coronavirus tests will see more usage, allowing for more individuals to get diagnosed.”

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