Dive Brief:

• CMS set the reimbursement rate for Medicare Administrative Contractors covering the main type of coronavirus antibody test at approximately $42, per an update Tuesday.

• That rate exceeds investment firm William Blair's $25 estimate for the category of tests, boding well for future reimbursement policy for antigen testing, analysts noted. Last month, the agency doubled its reimbursement for high-throughput molecular diagnostics, which the analysts said has "allowed all parties to run testing at profitable levels.​"

• The American Clinical Laboratory Association praised CMS’ latest action, saying in a statement it will encourage “a broad cross section of laboratories to rapidly scale up capacity” to perform serological testing.

Dive Insight:

Serological testing, which looks for antibodies against SARS-CoV-2, not the virus itself, could show what proportion of the population has been infected and identify individuals who may have some degree of immunity.

Under the new reimbursement regime, labs will receive $42.13 when they perform a serological test using a multi-step method. ACLA said the multi-step approach is the commonly performed form of serological test, including tests from Quest and Abbott, analysts at William Blair specified in a research note Wednesday. CMS set the rate for single-step serological tests at $45.23.

ACLA argues the establishment of the rate will encourage labs to offer SARS-CoV-2 antibody tests. The argument is underpinned by a belief that “the lack of sufficient reimbursement” stopped labs getting into coronavirus testing. CMS addressed one reimbursement issue when it increased its payment for high-throughput molecular tests from $51 to $100. ACLA said the change had “positive outcomes.”

In a white paper published last month, ACLA said serological testing could identify essential workers who have previously been exposed to the virus and are therefore less likely to be reinfected. The labs association also sees a role for antibody tests in the safe reopening of businesses and schools. An editorial published by scientists from around the world in Science Immunology on Tuesday expressed similar views, describing the use of serological testing as “paramount” to decisions about when to lift containment measures.

Analysts at William Blair said Tuesday's updates "continue the trend of favorable reimbursement for diagnostic testing as molecular reimbursement levels of roughly $50 for lower throughput and $100 for higher throughput testing were also a bit higher than expected and have allowed all parties to run testing at profitable levels.​"

That trend may bode well for antigen test makers, the analysts wrote, speculating that "if serology testing can garner a mid-$40 level reimbursement, antigen testing could be $50 or higher given the value these tests bring." Antigen tests are meant to rapidly diagnose active coronavirus infection.

The process of scaling up U.S. capacity for serological tests is already underway. Roche, in part partnering with LabCorp, said Tuesday more than 20 commercial and hospital lab sites are now running its Elecsys Anti-SARS-CoV-2 test, the claimed specificity of which suggests it is unlikely to generate false positives. Roche expects more than 200 labs to start running its test in the coming weeks, giving the U.S. the capacity to perform millions of tests per week. The company plans to ship “high double-digit millions” of kits this month.

Other organizations are also scaling up production. On Tuesday, Mount Sinai Health System and Renalytix disclosed the formation of a joint venture, Kantaro Biosciences, that has partnered with Bio-Techne to produce more than 10 million antibody test kits a month from July onward. The collaborators are now working to scale up production of a test developed at Mount Sinai, details of which were published in Nature Medicine last week.

Quest Diagnostics said May 18 it had performed and reported 975,000 antibody tests to date, with a current capacity to perform 200,000 per day.