How can policymakers encourage the expansion of at-home diagnostic testing for COVID-19?

By Nicholson Price, Rachel Sachs, Jacob S. Sherkow, and Lisa Larrimore Ouellette

As we have previously discussed, fighting the COVID-19 pandemic will require a massive expansion of testing. Diagnostic tests for who is currently infected are particularly important. Given a limited number of health-care providers and testing sites, at-home testing has emerged as an important route to expand diagnostic testing capability. But developing at-home diagnostic tests that are affordable, reliable, effective, and able to be administered by untrained individuals presents a number of challenges. How should policymakers encourage the development and deployment of such tests?

Why is at-home COVID-19 testing needed?

Currently, the vast majority of testing for active infection (principally by RT-PCR) requires a health-care worker trained to collect samples. In large part, this requirement arises because samples are collected using a nasopharyngeal swab—something like a very long Q-tip which is inserted through the nostril as far back as the ear. The task is unpleasant for the patient and requires training to do right. It can also be dangerous to the health-care worker, because patients often sneeze or cough in reaction to the swab, potentially exposing the worker to SARS-CoV-2.

As a result, getting tested for COVID-19 requires traveling to a testing site, whether a hospital, a clinic, or a drive-through site. Today, availability is still limited; appointments are often required, and some sites are limited to residents of a particular area. Getting to a testing site also requires actually getting to the site, which can be difficult for those without cars or ready access to public transportation (which itself brings risks). Unfortunately, the populations most vulnerable to COVID-19 frequently overlap with those lacking good access to personal transportation. 

At-home testing could ease the path to substantially increased testing, allowing more frequent testing of more people and readier access across different populations. At-home testing could lessen friction from transportation and site access and circumvent bottlenecks due to the limited availability of health-care workers.

What is the state of at-home testing today?

At-home testing requires something easier than nasopharyngeal swabs—either a nasal swab (i.e., something like a Q-tip about a centimeter up the nose rather than inches) or spit collection. Numerous efforts are underway to develop and validate such tests, which may be familiar to consumers from at-home spit kits offered by many consumer genetic testing companies. The FDA issued an Emergency Use Authorization (EUA) for at-home COVID-19 testing to LabCorp for its Pixel test on April 20, and in May, the agency issued five additional EUAs for at-home diagnostic testing to Rutgers, Everlywell, P23 Labs, Quest Diagnostics, and LetsGetChecked. The Rutgers and P23 Labs tests involve spit collection; the others use nasal swabs. 

Some of these tests are available right now to patients who report COVID-19 symptoms through a web form; for example, LetsGetChecked started selling its nasal test last Thursday, and Rutgers’s saliva-based test is available through outside partners including hims & hers or Vault Health. Others are available only through state programs. The tests range from $109 to $150 each, and the companies claim the ability to process hundreds of thousands of tests per week.

How does the FDA regulate such tests?

As we have previously explained, diagnostic tests usually require approval as medical devices, but the FDA can circumvent the lengthy approval process during a public health emergency by issuing EUAs. All COVID-19 diagnostic testing so far has been conducted under EUAs. Most of these tests require healthcare workers to administer them, but as explained above, there are now six authorized at-home tests. 

But not all efforts to deploy at-home testing have met with regulatory success. The Greater Seattle Coronavirus Assessment Network (SCAN), a Seattle-based testing effort backed by the Gates Foundation and others, used home testing kits to monitor COVID-19 throughout Seattle. On May 12, the FDA ordered SCAN’s efforts halted due to the lack of an EUA for diagnosis or institutional review board approval for research purposes, to some outcry. SCAN says it is in conversation with the agency to fix these problems, but testing has now been paused for three weeks. It is unclear why restarting the high-profile program has been delayed for so long.

Last Friday, the FDA released an EUA template “to streamline development of tests with at-home sample collection” and to address some of the “unique concerns about safety and accuracy” raised by home testing. The template applies only to saliva tests and nasal swabs; for other tests, such as nasopharyngeal swabs, the agency suggests contacting them separately. Tests should be validated on 20 “low positive” samples (i.e., samples with a small amount of the virus) with no more than one error and 10 each of “high positive” and negative samples with no errors. Tests should also be evaluated for stability, including to temperature variations expected during shipping. On the patient-facing side, at-home testing protocols must include a mechanism such as an online questionnaire or telephone appointment so that patients can be “determined to be appropriate for COVID-19 testing by a healthcare provider.” Developers also need to conduct a “human usability study” with at least 30 untrained participants of varying education levels.

Who would pay for at-home vs. provider-based tests?

A key policy driver in innovation incentives is insurance reimbursement. If reimbursement for at-home test kits is less than reimbursement for tests administered by providers, healthcare technology companies will have weaker incentives to devote resources to developing at-home tests.

At present, none of the initiatives sponsored by the federal government formally distinguish between at-home and provider-administered tests in terms of reimbursement availability. In the Families First Coronavirus Response Act (as amended slightly by the CARES Act), Congress required private health insurers, Medicare, and Medicaid to provide coverage with no cost-sharing for both COVID-19 tests themselves and for any services related to the administration of those tests. Subsequently, in the Paycheck Protection Program and Health Care Enhancement Act, Congress provided for an additional $25 billion investment in diagnostic testing, including $11 million specifically for local entities to “develop, purchase, administer, process, and analyze COVID-19 tests.” 

To be sure, the government may be envisioning that COVID-19 testing will be administered by a healthcare worker. CMS’s releases on the topic of Medicare reimbursement for COVID-19 diagnostic testing lay out a variety of circumstances in which a wide range of healthcare workers would be reimbursed for obtaining test samples from patients, from the hospital to the home health context, but do not explicitly discuss a situation in which the patient herself collects the sample for analysis. This should not be surprising, though, as the function of such documents is to ensure that providers will be reimbursed not only for the test itself, but also for the services they provide in administering that test. Where there is no such service provided, the information is less relevant. In general, even if Congress and CMS envision provider-led testing, existing laws and policies seemingly do not require it, as long as the test results are subsequently analyzed in a laboratory setting. 

Existing payment systems, however, may make it difficult for smaller firms to successfully compete in this market against larger, established players like LabCorp and Quest (who have both received EUAs for their at-home tests, as noted above). LabCorp and Quest have already developed extensive infrastructure for working with providers and insurers for the administration and reimbursement of diagnostic testing, including other, non-COVID-19 tests which are administered at home but analyzed in a laboratory setting. They may also be better able to work with the FDA and CMS, as repeat players in the regulation of diagnostic tests through both agencies. They may be better situated to work with the federal government to navigate the complexities of new federal laws and guidances. Thus, since April 30, LabCorp has been able to offer at-home testing with no upfront cost. Policymakers should consider whether there are ways to help smaller labs navigate payment procedures for tests.

What innovation policy levers can encourage the development of more, good at-home tests?

Incentivizing more and better at-home COVID-19 tests will likely require pulling on several different innovation policy levers. First, the FDA could selectively encourage the development of accurate saliva and nasal-based tests over its current suite of nasopharyngeal ones (and even then, perhaps, saliva-based tests over nasal-based). Given the unpleasantness of giving oneself a nasopharyngeal swab, saliva and nasal test innovation is more likely to benefit at-home tests than methods needing a provider for collection. The FDA could reduce regulatory burdens by issuing clear guidance on the acceptable sensitivities of such tests, their labeling instructions, and the stability of the reagents used in collecting samples. The FDA could also set guidelines to improve manufacturing at scale, including setting guidelines for manufacturing tolerances regarding buffers and storage—important when containers are delivered to home users’ hands rather than more controlled laboratories or physicians’ offices. The FDA’s current at-home EUA template is a good step in the right direction, but it needs to contain more concrete guidance to developers with enough leeway to allow them to experiment. Done well, such regulatory innovation could promote technological innovation. 

At the same time, the FDA could exercise its enforcement authority for at-home tests more expansively. Allowing some measure of forgiveness for at-home tests in the process of complying with the FDA’s changing EUA guidance—but have yet to formally receive the authorization—may help encourage at-home test developers on the fulcrum of approval.

Apart from the FDA, insurers and payers could alter coverage and reimbursement policies to explicitly cover or even favor at-home tests—and, more to the point, at-home tests whether conducted under a physician referral or not and whether the patient is symptomatic or not. CMS’s guidance, at the moment, makes it unclear how samples collected at home would be reimbursed, by whom, and for how much, different from provided-collected tests. Apart from these concrete guidances, CMS could also strongly incentivize at-home tests by reimbursing the producers of at-home test kits at an amount even beyond the amount it reimburses producers of tests administered by health-care providers. Although CMS might need congressional authorization for this policy change, it would be a dramatic incentive in favor of the development of at-home COVID-19 tests while making things easier and better for patients.

To be clear, there are potential downsides to a drastic scale up of at-home testing. Where testing becomes mandatory, especially in environments where all people need to be tested prior to entering some setting—such as workplaces or university campuses—individuals could use the availability of at-home tests to deliberately provide false-negative results. No great act of imagination is needed to think of such scenarios: if you need a negative test to get back to work or class, you’ll find the spit—literally—to get it done. Additional innovations might be needed to address this, such as Vault’s requirement to supervise saliva collection over a Zoom call. But these concerns are outside the scope of typical concerns about medical diagnostics’ quality and payment models. The first step is encouraging the development and wide distribution of at home testing.

This post is part of a weekly series on COVID-19 innovation law and policy. Author order is rotated each week.