United States: CMS Announces Reconsideration Of Clinical Trial Billing Policy

The Centers for Medicare and Medicaid Services (CMS) has announced that it is reconsidering its national coverage decision (NCD) on the Clinical Trial Policy (the policy), which describes the circumstances under which Medicare will cover certain items and services provided during the course of a clinical trial. Under the current NCD, which has been in place since September 19, 2000, Medicare generally covers the "routine costs" of "qualifying" clinical trials, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in all clinical trials. Although the policy broadened the scope of Medicare payments and was instrumental in expanding access to clinical trials for Medicare beneficiaries, its general terms left substantial uncertainty in the research community regarding which costs are in fact eligible for reimbursement under Medicare.

The current NCD defines "routine costs" as all items and services that are otherwise generally available to Medicare beneficiaries and that are provided in either the experimental or the control arms of a clinical trial. Routine costs do not include the investigational item or service itself (although many investigational medical devices may be eligible for coverage under Medicare rules for coverage of medical devices under Investigational Device Exemptions), any items or services provided solely for data collection and analysis, or items and services "customarily provided" by the research sponsors free of charge for any enrollee in the trial.

Since the passage of the NCD, a number of issues have been left unsettled:

• The NCD does not define what is meant by "customarily provided." It is not clear whether this exclusion from routine costs refers only to expenses that are free to all enrolled subjects, or whether it also includes expenses that are free only to a cohort of subjects or to subjects enrolled at a particular institution in the case of a multi-site study.

• Although the NCD originally proposed that CMS would develop criteria for research institutions and industry sponsors to self-certify clinical trials as "qualifying trials," CMS never developed or implemented this option. Thus, subjects who were participants in clinical trials that were not deemed "qualifying trials" have not had access to Medicare reimbursement for standard-of-care costs under the NCD.

• The NCD does not define what is meant by the phrase "therapeutic intent," which is one of the characteristics a sponsor must demonstrate in order for its trial to be deemed a "qualifying trial."

• The NCD’s effect on reimbursement of items and services provided during the course of clinical trials testing new test methods, as opposed to new test articles, has never been clarified, nor has the relationship between the NCD and the Medicare rules for coverage of medical devices under investigational device exemptions.

• In light of both the NCD and the Medicare secondary payor rules, there is considerable uncertainty as to whether research sites can turn to industry sponsors for reimbursement for standard-of-care items or services denied Medicare reimbursement. In addition, the NCD and Medicare secondary payor rules are widely regarded as prohibiting an industry sponsor from offering to pay for study-related injuries in the event insurance coverage is denied for medical treatment rendered in response to the injury. This has often forced research institutions to accept financial burdens for subject injury costs and the costs of non-reimbursed standard-of-care items, rather than allowing for an agreement to share or transfer these expenses to industry sponsors of clinical trials.

As a response to the current uncertainties in the NCD, CMS has identified 10 issues it intends to address as part of its reconsideration. These include:

• Clarify payment criteria for clinical costs in research studies other than clinical trials

• Make sure that Medicare-covered clinical trials are enrolled in the National Institute of Health’s (NIH) clinical trials registry website (www.clinicaltrials.gov)

• Develop criteria to assure that any Medicare-covered clinical research study includes a representative sample of Medicare beneficiaries, by demographic and clinical characteristics

• Clarify the definitions of routine clinical care costs and investigational costs in clinical research studies, including clinical trials

• Remove the self-certification process that was never implemented

• Clarify the scientific and technical roles of federal agencies in overseeing investigational new drug (IND) exempt trials

• Determine if coverage of routine clinical care costs is warranted for studies beyond those covered by the current policy

• Clarify how items and services that do not meet the requirements of section 1862(a)(1)(A) of the Social Security Act ("reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member") but are of potential benefit can be covered in clinical research studies (Medicare has separately just released a final guidance on "Coverage with Evidence Development" that includes provisions for coverage of items and services that may not meet the requirements of section 1862(a)(1)(A) under "Coverage with Study Participation.")

• Clarify whether and under what conditions an item or service that is not covered by Medicare in a non-research setting may be covered in the context of clinical research intended to study the effect of the item or service on health outcomes in Medicare beneficiaries

• Discuss Medicare policy for payment of humanitarian use device (HUD) costs

This reopening offers members of the clinical research community an opportunity to offer suggestions on how best to resolve these outstanding issues, with the hope of reducing the compliance and financial risks associated with improper interpretations of the current Clinical Trial Policy. Interested parties can submit public comments to CMS on these 10 issues until August 9, 2006. It is expected that CMS will then release a proposed decision memorandum after this initial comment period and will again solicit public comment.

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