Medicare Trial Coverage Sometimes a Trial Itself

February 1, 2004

Applied Clinical Trials

Applied Clinical Trials, Applied Clinical Trials-02-01-2004,

Two experts share their wisdom on how to correcly apply for Medicare coverage for clinical trials.

There are innumerable questions raised by the labyrinth of billing options when CROs attempt to get Medicare coverage for a clinical trial. However, they all boil down to one: will my trial be covered?

In a live audio conference titled Medicare Coverage for Clinical Trials, (hosted by HCPro, Nov 21,) Bill Sarraille, JD and Paul Kalb, MD, Esq., tried to answer as many of the mysteries surrounding Medicare coverage as they could in an hour of presentation, and a half-hour of Q&A. They are both partners at the national law firm Sidley Austin Brown & Wood LLP, specializing in healthcare law.

Coverage questionsCould a combination product under IND get Medicare funding? That was an area that was yet to be resolved, answered Sarraille. What if a Medicare HMO refuses to pay for an approved NIH study? That should be a billable trial, Kalb responded. Other questions poured forth: What about emergency and compassionate use of nonapproved devices? And trials sponsored by companies? And who says a test is routine?

The confusion comes because, like a fractal, each Medicare rule has an exception, which in turn has an exception, and so on. The main rule is: no payment for clinical trial research. The main exceptions are for experimental trials both reasonable and necessary for the beneficiaries.

Sarraille then gave an example that added even more confusion. That is when the original Medicare-covered malady becomes something that needs to be, and is, treated with an experimental therapy. In this ambiguous case, the original treatments may not be covered, if they are deemed to be a precursor to the experimental therapy. Its a rule where intent of the care matters: was a set of blood tests done as a precursor to a device implantation or just for good practice?

The group designated to determine if a treatment is covered often has an evaluation to make beyond a rubber-stamped yes or no. In this case, even though Medicare is a federal institution, the decision-makers who apply the rule are at the state and local levels. This is a problem for multisite contract research organizations, since the same trial by the same CRO may get approved for coverage in North Dakota while being denied in North Carolina.

Medicare covers all routine costs for beneficiaries of approved trials, so its important to know what the government considers not routine. Any items and services provided solely to satisfy data collection and analysis arent covered, for instance. So a series of CT scans must benefit the patient as well as the statistician to be eligible. Any services used to determine if a patient is eligible for a trial arent covered, either.

Most controversial of all, no services that are customarily provided for free to the patient by the research sponsor are covered. I think this is a poor ruling by the government, Sarraille said, because whos to say whats customary? A CRO will have to be very familiar with its fields of study, specifically the billing practices, to know whats customary in the industry.

Exceptions can even be found when considering if a treatment is Medicare-covered or not. In cases where theres an approved study on a noncovered item or service, for instance, Medicare will pick up all routine costs of the trial except for the item or service in question.

Exception-al RulesCROs must first find out if they are to receive funding at all before asking how much they will get. There are two avenues to receive Medicare funding for a clinical trial. The first route is for Category B medical devices being used with FDA protocols. So an approved cardiac stent would probably be approved for use in a not-yet-indicated part of the body.

The second exception for qualifying clinical trials is the trickier ruleone with several subexceptions. To qualify, a trial either has to be approved by a board of overseerswhich hasnt been created yet and therefore isnt an option right nowor has to be deemed qualified by already being vetted by another governmental branch. That covers trials funded by groups like the VA, NIH and CDC, as well as trials under INDs from the FDA.

That board may not be assembled for a few more years, due to pressures from Washington. The government is not committed to a timetable to create this board, Sarraille said, hinting at a political morass that makes Medicare funding resemble a traffic-free highway.

If all this confusion isnt enough to make you anxious, theres also danger. Incorrectly filing for Medicare coverage could lead to fraud investigation not of the patient but of both the principal investigator and the billing provider. And recent federal Civil False Claims Act cases for bad billing have been settled for eight-digit figures.

The settled false claims cases, though, were often brought by whistle-blowers who, under the qui tam provision, can receive a portion of the settlement up to 30 percent. In the three cases Kalb discussed, with settlements of $10.8 million, $2.6 million and $32 million, there appeared to be purposeful fraud instead of an understandable confusion over correct requesting and proper HIPAA notification. But no CRO wants to prove, under threat of a multimillion dollar lawsuit, that they were merely ignorant of the law instead of willfully fraudulent.

As with most government regulations, the fewer red flags your form raises, the better. Kalb and Sarraille agreed that, for instance, there could be trouble if a line in a contract stated that the sponsor will pay for costs for careif Medicare didnt pick up the tab. That would raise some eyebrows, Kalb said.

All the oversight and paperwork are to ensure that only medically helpful research gets compensated. If youre giving an experimental treatment to beneficiaries when they would be receiving a traditional Medicare-covered treatment otherwise, your trial should probably be covered. On the other hand, if youre repeating an already-established experiment with no new differences, or running tests to benefit your client but not the patients, maybe the government shouldnt be footing the bill.

Kalb concluded with some words of wisdom. Be careful, be cautious and go ahead and ask before you go ahead and bill.