Learn how to navigate the labyrinth of Medicare reimbursement for clinical trials

Medicare and insurer reimbursement in clinical trials is so complex that even the National Academy of Sciences couldn’t simplify things. In fact, proposals offered by a task force convened to address the subject five years ago were never adopted.

"The medical leadership had a long series of meetings with the National Institutes of Health (NIH), and the issue was whether or not we could come to a joint agreeable position on Medicare and other insurer coverage of clinical trials," says John Ludden, MD, director of the MD/MBA program at Tufts University Medical Center in Boston. He was a member of the task force.

"This discussion had many aspects, but what stands out in my mind were a set of proposals that were never adopted by anybody," Mr. Ludden says. "The proposal was basically that Medicare should cover clinical trials, and care associated with clinical trials is really the issue, partly because it was absolutely — in my mind — unethical to both get patients into trials as subjects and also to require them to pay for their care," he adds.

This proposal’s most contentious and difficult issue involved non-NIH-sponsored clinical trials, Mr. Ludden notes.

While NIH-sponsored research proposals go through a rigorous scientific review process, the same may not be true for non-NIH trials, he says. "Would other trials in order to qualify for reimbursement go through a similarly rigorous process?" Mr. Ludden asks. "We could not agree among ourselves about how that would work and who would pay for the vetting."

Institutional review boards have become a little tighter in their scientific review in recent years but, nonetheless, there still are real questions about how one would administer this process and how a Medicare officer or officer of another insurer would know that clinical trial X had met the criteria, Mr. Ludden explains.

"The principle that Medicare pays for what it pays for whether or not it’s part of a clinical trial still is the watch word," he says. "In other words, if XYZ is normally paid for by Medicare, it normally will be paid for and not disqualified because the patient is in a clinical trial."

Appropriate billing required

However, assuring the proper Medicare reimbursement for medical services performed during the course of a clinical trial can be a little challenging.

"I think the evolving story in the area is the continuing concern about the appropriateness of billing Medicare for certain items in a clinical trial," says Jan Murray, a partner with Squire, Sanders & Dempsey LLP of Cleveland. "There’s concern about whether they’re appropriately billing because it’s very difficult for the system to determine whether the billing is appropriate or not," she says. "That’s a real concern on the part of academic medical centers."

During President Clinton’s administration, there was a national coverage decision to cover the routine costs of clinical trials, not including the use of investigational drugs and investigational devices that fall under Category A in which safety and efficacy have not been demonstrated, Ms. Murray notes.

"Category B devices are reimbursed, and the Food and Drug Administration determines which are Category A and Category B for the Centers of Medicare & Medicaid Services [CMS]," she reports. "Most will be Category B devices that have to go through a clinical trial because there’s been a change, and the change doesn’t affect the safety and efficacy of the device."

For example, there might be an electrical lead on a pacemaker that is being studied, Ms. Murray says.

Standard Medicare coverage

She offers these suggestions for improving Medicare billing compliance during clinical trials:

• It must be a qualified clinical trial. To be eligible for Medicare reimbursement the clinical trial must be qualified under national coverage determination (NCD), Ms. Murray says. "If a trial does not qualify, it may still qualify if it meets several criteria, which is complicated."

Clinical trials that solely use healthy volunteers are not covered, although if healthy volunteers are included as a control group in a trial studying patients with a disease, then the trial qualifies, she notes. For example, one issue concerns what is routine care paid by Medicare, Ms. Murray says. "Routine care is generally anything that is done that would ordinarily be covered under Medicare, so this has to be a trial that would ordinarily go for reimbursement and that is necessary for the health and well-being of patients," she explains. "And it has to be a service that is normally available to Medicare."

• Clinical trial monitoring may be excluded. Procedures done solely for monitoring purposes are excluded from Medicare reimbursement, Ms. Murray says. "If you are doing a test to monitor complications, then it is eligible for Medicare reimbursement," she explains. "Or if the procedure is to treat or prevent complications, then it is eligible for Medicare reimbursement."

But items collected solely for data analysis and items that normally are provided free of charge by the hospital are not eligible for Medicare reimbursement, Ms. Murray adds. "It has to be a qualified clinical trial and generally a clinical trial that provides services ordinarily covered under Medicare," she says. "It has to have a therapeutic intent."

• Compliance can be a big issue for hospitals, particularly. "It’s not an easy rule to apply for hospitals," Ms. Murray says. "This is why there’s a significant compliance issue out there that many hospitals are facing."

Each clinical trial has its own budget, and that budget combined with the protocol and clinical trial agreement will dictate what the sponsor or grant will finance, she says. "Under Medicare, you can’t submit a claim for services not covered, and, secondly, you can’t submit a claim that someone else has paid because that’s double billing," Ms. Murray explains. "So the two biggest concerns are telling what is covered and making sure that someone else has not paid for it."

One way to determine what’s covered and what might constitute double billing is to look at the clinical trial agreement to see what is covered and what the budget is, she suggests. "Look at the protocol to determine why something’s being done and to be aware of what’s communicated to the patient," Ms. Murray says. "The informed consent process is very important in this too because the informed consent has to include a statement that identifies to the patient what their financial identity is."

For example, if the informed consent document tells subjects that they or their insurer are not responsible for any costs in the clinical trial, then investigators and institutions cannot bill Medicare for the costs, she says. "Those three documents: the clinical trial protocol, the clinical trial document, and the informed consent document are very important, and you should look at these for each trial," Ms. Murray adds.

Other items to note include:

— Which expenses include investigational items or services?
— Which tests are provided solely for data collection or analysis?
— Which sponsor or granting agency is paying for a service, so that an institution does not double bill that item?

Ideally, institutions would conduct this billing compliance process once a month, Ms. Murray says.

Another issue is the flat-rate per-patient charge that may or may not include tests conducted during the course of a clinical trial, she notes. "It’s important for companies to identify what they’re reimbursing academic medical centers for and to be aware that Medicare does pay for certain things, so perhaps they shouldn’t pay for those," Ms. Murray says. "But they need to identify exactly what costs they’re picking up to create a clean, nonfraudulent claim."

• Know the routine costs of a trial. "I think the important thing is for both parties to understand the routine costs of the trial and what the costs are that are being incurred that go specifically to the cost of the drug or investigational drug, device, or service," she says. "So if someone is collecting data to analyze the end points, but the data also will give them information about the complication they’re concerned about that relates to safety issue, then it can be hard to distinguish what is reimbursed."

• Federal auditors are investigating some clinical trials. Medicare concerns are becoming increasingly important and were mentioned in an OIG Workplan, Ms. Murray points out.

"There’s a major investigation that involves the use of investigational devices, and that one resulted in a number of hospitals settling for many millions of dollars," she notes. "So the feds are aware that this is a potential area of concern for clinical trials reimbursement and investigational device coverage, where there’s a lot of room for error and problems."

These recent investigations have heightened awareness in the research community, and some institutions have discovered that their main systems for billing Medicare do not accommodate research very well, Ms. Murray adds. "They’re all scrambling to come up with new ways to deal with this in-house, and that’s a real challenge," she says.

The best bet for finding out more on Medicare reimbursement would be to contact legal counsel and consultants, including large accounting and financial auditing firms that could provide a billing analysis to determine whether an institution has been handling the Medicare billing properly, Ms. Murray concludes.