Medicare and the NCD

While there is no single correct way to develop process compliance controls to meet federal clinical trials billing regulations around Medicare, standardization of the entire billing process is key. Establishing standards around a comprehensive clinical trial billing compliance program will help mitigate billing non-compliance risks. The risks of not complying with federal clinical trial billing regulations can lead to research suspension, fines, and/or the imposition of corporate integrity agreements.

There have been numerous federal investigations and settlements involving improper clinical trials billing. Perhaps one of the most notable investigations involved Rush University Medical Center. In 2003, Rush reviewed its clinical research operations and uncovered a number of errors in which Medicare was improperly billed for research services as routine costs.

Effective July 9, 2007, Clinical Trial Policy National Coverage Determination (NCD) from CMS, says 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. 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.

What are routine costs?

Routine clinical trial costs include all items and services that would normally occur as part of the patient's care outside of a clinical trial. Costs associated with the prevention, diagnosis, and/or treatment of complications arising from participation in clinical trials are also covered. Standard Medicare billing rules apply to items deemed routine costs under the NCD. If Medicare covers the costs of items and services outside of the clinical trial, then they are covered during the clinical trial.

A clinical trial must meet the following requirements under the NCD to receive Medicare coverage for routine costs:

• The subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category and is not statutorily excluded from coverage.

• The trial must not be designed exclusively to test toxicity or disease pathophysiology. It must have a therapeutic intent.

• Trials of therapeutic interventions must enroll patients with diagnosed disease rather than healthy volunteers. Trials of diagnostic interventions may enroll healthy patients in order to have a proper control group.

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:

• The principal purpose of the trial is to test whether the intervention potentially improves the participants' health outcomes.

• The trial is well-supported by available scientific and medical information or it is intended to clarify or establish the health outcomes of interventions already in common clinical use.

• The trial does not unjustifiably duplicate existing studies.

• The trial design is appropriate to answer the research question.

• The trial is sponsored by a credible organization or individual capable of executing the proposed trial successfully.

• The trial is in compliance with federal regulations relating to the protection of human subjects.

• All aspects of the trial are conducted according to the appropriate standards of scientific integrity.

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. 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.

Clinical trials billing compliance seems like a simple concept: Do not bill Medicare for services being paid by a sponsor and/or third-party payer, and do not bill Medicare for services that do not meet the requirements under the Clinical Trials NCD. 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.

A comprehensive clinical trial billing compliance program can help organizations establish standards to meet regulatory requirements and provide sustainable organizational consistency.

—Jim Moran, Erika Stevens and Julie Statzel, Ernst & Young LLP

*The views herein are those of the authors and do not necessarily reflect the views of Ernst & Young LLP.