Developments, news and strategies for drug development specific to phase I through Phase III global clinical trial management, execution, project management and outsourcing. Go→
News, articles and issues specific to clinical trial practice and implementation at the investigative site level. Go→
News, developments and strategies related to eClinical, data management, data collection, ePRO, and more information technology used in the drug development chain. Go→
News, articles and issues specific to laboratories role in the clinical trial, including ECG, imaging, genotyping, tissue samples and more. Go→
News, developments and strategies for clinical trials conduct in relation to the FDA, EMEA and other global regulatory authorities overseeing the drug development industry. Go→
News, articles and strategies related to clinical trial design which impact postmarketing studies, therapeutic areas, adaptive trials, statistics, protocols and more. Go→
Federal clinical trials billing regulations mandate that payers should not be billed for services that are not considered to be directly related to patient care or are being paid by someone else (such as participation in a clinical trial). In an effort to increase participation in clinical trials, former President Bill Clinton issued an executive memorandum directing the Secretary of Health and Human Services to:
“Explicitly authorize [Medicare] payment for routine patient care costs … and costs due to medical complications associated with participation in clinical trials”(1)
The Health Care Financing Administration (HCFA), now known as the Centers for Medicare and Medicaid Services (CMS), issued the Clinical Trial Policy National Coverage Determination (NCD) in response to the memorandum. Effective July 9, 2007, Medicare 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.1 Previously, Medicare did not cover patient care costs associated with enrollment in a clinical trial. The NCD for Routine Costs in Clinical Trials (310.1) is now the standard by which commercial payers base clinical research coverage decisions.(2)
What are routine costs?
What is a qualifying trial?
Exhibiting these three criteria, however, does not automatically qualify a clinical trial for Medicare coverage of routine costs. There are seven desirable characteristics that clinical trials must possess. Some clinical trials are automatically qualified as they are presumed to meet the following characteristics: (2)
Certain clinical trials automatically qualify for Medicare coverage of routine costs because they are deemed by the Agency for Healthcare Research and Quality (AHRQ) to likely possess the seven characteristics. These trials include federally funded trials, trials conducted under an investigational new drug application (IND) and drug trials that are exempt from having an IND under 21 CFR 312.2 (b) (1). (2)
Under the NCD, many clinical trials’ study services can be considered routine costs, but the definition of routine costs requires careful examination of the study protocol and the sponsor’s contract to determine which items and services are payable by the sponsor (1). These items and services are not covered by Medicare. The financial disclosure language in the informed consent form also must be examined carefully. Items and services disclosed to the research participant as being free or paid for by the sponsor or third-party payer are not billable to Medicare (2).
Rush voluntarily disclosed these billing errors to the U.S. Attorney’s Office. In effort to correct overpayments received from improper clinical trials billing, Rush entered into a settlement agreement with the U.S. Department of Justice, and a corrective action plan was mandated by the Office of Inspector General (OIG). The plan requires Rush to annually certify its compliance program, conduct extensive auditing and monitoring of its clinical trials billing program and report improper billing and overpayments (3).
The Rush settlement was among the first cases to focus entirely on the Clinical Trials NCD (1). Following its example, every clinical trial must be reviewed under the Clinical Trials NCD before enrolling research participants to determine which services are considered “routine costs."(5). Medicare coverage analysis (MCA) is the process of reviewing and mapping costs according to the study protocol as either routine costs or as costs billable to the study sponsors and/or a third-party payer.
The Rush case was pivotal in affirming the need for guidance regarding clinical trials billing compliance. Since the settlement, many institutions have focused extensively on improving their clinical trials billing operations.
However, navigating the process of billing clinical trials has proven quite complex – settlement cases offer ample evidence – and often frustrating. Many stakeholders question whether the Medicare rules accomplish their goals, and in fact, the CMS has proposed a number of changes in an attempt to clarify gray areas surrounding the rules (5).
Significant risks exist for clinical trials billing non-compliance. These risks include:
How to maintain clinical trials billing compliance in your organization
Failure to comply with federal clinical trial billing regulations can lead to research suspension, fines and the imposition of Corporate Integrity Agreements (CIAs). Establishing standards is the key to mitigating risks around billing non-compliance. For more information about Ernst & Young’s research and experience on this topic, please visit www.ey.com/healthcareadvisory.
The views expressed herein are those of the author and do not necessarily reflect the views of Ernst & Young LLP.
The authors of the piece are part of the Performance Improvement Advisory- Health Care, Ernst & Young LLP
(1) Ryan D. Meade. Legal issues in billing Medicare for medical research services, the RAP Sheet. Washington DC: American Health Lawyers Association; 2006.