California aims to cut cost of average COVID-19 test, shift more charges to insurers
California plans to shift more COVID-19 testing costs onto private insurers as part of a strategy overhaul aimed at reducing costs and expanding testing to more vulnerable people, the leader of the state’s health care agency said Tuesday.
Moving forward, Gov. Gavin Newsom’s administration will encourage people to seek coronavirus testing at doctor’s offices and clinics in an effort to free up state-funded testing sites for Californians who are harder to reach through the traditional medical system, California Health and Human Services Secretary Dr. Mark Ghaly said.
Newsom and other officials had previously encouraged all Californians to get free testing at state-funded sites in their communities, such as the one at Cal Expo in Sacramento, but high test costs and an explosion in new COVID-19 cases has forced the administration to rethink its strategy, Ghaly said.
Testing costs have emerged as a major concern for the state as the pandemic has progressed and the state’s economy has plunged into a recession. The state currently is paying a little over $100 per test on average, Ghaly said.
That’s a significant decrease from the start of the pandemic, when California paid nearly $340 per COVID-19 test for the first month of its partnership with Verily Life Sciences, according to the state’s contract with the company.
As that contract showed, costs can vary dramatically from site to site. For example, in the first month the state paid $819 per test at the Verily site in San Mateo, in large part because of a high rent.
Moving forward, Ghaly said the state wants to bring its per test costs below $100 per test.
The Newsom administration plans to release new rules requiring health plans to pay for test costs in most cases, and the administration will work with doctors, pharmacists, nurse practitioners and other health providers to help them offer testing in their offices, said Lourdes Castro Ramírez, Business, Consumer Services and Housing Agency secretary.
“Moving more testing to health care provider offices and laboratories (will) allow state testing sites to focus on individuals who are harder to reach,” Castro Ramirez said during a Tuesday press conference. “New regulations will require health plans to pay for the costs of tests in most instances. This will allow vulnerable populations to obtain appointments at state testing facilities.”
Those vulnerable populations include people who are uninsured, as well as those who “have trouble accessing current sites due to their work hours, work or geographic locations, language barriers, transportation, etc.,” Health and Human Services spokeswoman Kate Folmar wrote in an email.
California Association of Health Plans spokeswoman Mary Ellen Grant said insurers are waiting to see the details of the new regulations and will work with the Newsom administration “to determine how today’s announcement changes our current practice.”
Jen Flory, a policy advocate at the Western Center on Law and Poverty, said she welcomed the administration’s intent to hold health plans accountable for covering COVID-19 testing and to expand testing in vulnerable communities. She said it’s important that the state ensure testing is available, in particular, to low-wage and essential workers, people with limited English proficiency and the uninsured.
But the state must still provide flexible testing options like the state’s drive-thru testing sites for Californians, even as it pushes to make more testing available in traditional medical settings, she said.
“There needs to be a way for people to get testing outside of traditional 9-5 doctors offices,” she said.
This story was originally published July 14, 2020 at 3:58 PM with the headline "California aims to cut cost of average COVID-19 test, shift more charges to insurers."