Compliance Corner

Here are tips on staying compliant with Medicare reimbursement rules

Systematic oversight is important

Clinical trials administrators and investigators should make certain their processes and practices clearly assign research health care services to the correct payer, an expert advises.

The Centers for Medicare and Medicaid Services (CMS) last year attempted to revise standards for research billing, but ended up leaving the rules as complex as they have been since the last change in 2000, says Mark Barnes, JD, counsel for Ropes & Gray of New York, NY. Barnes also is the executive vice president of the Saint Jude Children's Research Hospital in Memphis, TN.

Basically, Medicare will pay for any standard of care services received by a patient who also is a research participant, Barnes says.

"Services that exceed standard of care and those delivered in support of an experimental therapy are not covered," he says.

But this only applies to services that are only associated with the experimental therapy, and are not associated with standard of care therapy, a distinction that was changed in 2000, Barnes notes.

"Under the pre-2000 law, if a patient received standard of care with a regular FDA-approved cancer therapy and also received infusion and hydration therapy for a standard of care drug, then all of this would be covered," he explains.

"But if the same patient had the same diagnosis and same illness and the same standard treatments, but instead of receiving the standard of care drug was receiving an experimental drug, then the old law would say the infusion and hydration therapy couldn't be billed to Medicare," Barnes adds. "So that left a real discrepancy."

The problem was that Medicare had a general rule that any service provided to support an experimental drug or device or procedure would be excluded from Medicare coverage, even if the supporting service was standard of care, he says.

Then in 2000, Medicare decided to eliminate the application of the non-covered services rule and allow patients on experimental protocols to receive the standard of care services and bill these to Medicare, Barnes says.

The biggest challenge research hospitals now face is how to implement Medicare's rules regarding which services should be billed to Medicare and which should be billed to the research project.

"The difficulty is our billing systems for billing insurance are set up in such a way that they don't distinguish between services rendered in standard of care and those rendered in clinical trials," Barnes explains. "They go out by manual processing or automatic servicing."

Institutions need to design a research compliance system that takes into account what is billable to Medicare and what is not, he suggests.

"A hospital or clinic or practice must design a billing system so that it segregates the standard of care services delivered to that patient from the non-standard of care services delivered to that patient and only bill the non-standard of care services," Barnes says.

There are two practical approaches to achieving this system: One would be a mechanized system, and the other is a manual processing system.

"You have to know which patients are on active protocols and which are not," Barnes says. "So the first step is flagging on the paper chart or electronic records which patients are in the research protocol."

Then the mechanized or manual system needs to decide which services given to the research patient are standard of care and are billable to Medicare, Barnes says.

"One can program this into the electronic billing system form, or you can have a nurse or clerk in the billing coordination process put these in by hand," he adds. "The problem now is that the computerized billing systems, which were designed in the 1960s and 1970s and then revised in the 1980s and 1990s are not designed to do that."

One best practice compliance offices should follow is to have investigators do an analysis from the beginning of a trial about which services in the research protocol are standard of care and which are not, Barnes suggests.

This analysis should occur with both electronic and manual systems.

"Don't err on the side of calling everything standard of care," Barnes says. "There needs to be compliance oversight for the physician, and the physician investigator needs to do this analysis for the entire protocol."

Also, there should be someone checking the investigator's analysis to make certain there's logic in the decision-making process, he adds.

"When you look at literature for what is standard of care, there is a lot of information about addresses established clinical pathways," Barnes says. "These should be compared to the protocol when deciding what is standard of care and what's not."

Finally, even when something is legitimately billable to Medicare, if that service has already been paid for in the research grant or in the research contract, then the investigator cannot bill it to Medicare, Barnes says.

For example, if a major pharmaceutical company has included payment for a particular service into the clinical trial budget and has paid for this service for research participants, then the research institution cannot take that money and bill for that service, Barnes says.

Research institutions that make billing mistakes due to omitting the oversight process run risk of a federal audit, he notes.

"There have been a number of high-profile audits around the country where CMS has investigated inappropriate billing," Barnes says. "CMS is very active on this issue, and it's been on their master work plan published annually for the last several years."