Compliance Advisory:

Complying with the

CMS Clinical Trial Policy November 2007

CMS Leaves Clinical Trials NCD at Status Quo What Should Providers Do Now?

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ith the Centers for Medicare & Medicaid Qualifying Clinical Trials: Services (CMS) leaving the Clinical Trial Threshold Question is Critical Policy (CTP) essentially intact and industry attention to clinical research billing compliance at its height, providers should not wait to implement their clinical For any items or services required by the protocol to be research billing compliance initiatives. The proposed billed to Medicare, the research study must first qualify CRP from CMS was never meant to alleviate the for coverage. If the research study does not qualify for coverage, then even items and services that are immediate risks providers face from medically necessary will not be covered. fundamental operational challenges of The final CTP The exception to this broad non-coverage not safeguarding their billing systems. involves treatment of complications keeps the entire The four highest risk areas providers need to tackle and implement safeguards for conceptual framework which will always be covered during research. are: a) not billing for items and services of the original that are paid for by a contract or grant; The CTP uses the term “qualifying b) not billing for services promised free rule which allows clinical trial” to describe a research in the informed consent; c) determining study that qualifies for coverage. There Medicare to cover whether a study is a qualifying clinical trial; d) applying national and local “routine costs” during has been considerable controversy and confusion over what constitutes a Medicare rules to any items and services “qualifying clinical qualifying clinical trial. If the research in a research study that are “routine study as a whole does not qualify for trials.” costs.” coverage, then no services are billable. A qualifying clinical trial is a research study that is one of 4 types of studies that are “deemed” to have 7 What Research Does the CTP Apply to? “desirable characteristics.” This is a two part test. The The CTP has always had both a reimbursement chart on this page illustrates the criteria for a research dimension to it and an important compliance dimension. study to be a qualifying clinical trial under the CTP. The reimbursement aspect of the CTP sets out criteria for the types of clinical research services that can be The first part of the qualifying clinical trial test involves billed to Medicare. The compliance aspect of the CTP meeting the 7 desirable characteristics. Currently there draws boundaries around what cannot be billed and is no process outside of being “deemed” by CMS to have calls on providers to implement compliance safeguards the desirable characteristics. CMS considers four types to prevent false claims. of studies to meet other government rules that ensure Providers need to be concerned with any research that they have the highly desirable characteristics. The study which requires the investigator to interact with draft CRP from April 2007 proposed to eliminate one a patient and that interaction could be caught by the of the deemed studies, the IND exempt studies. The charge capture system. If the research study requires a service that might in other contexts be billed, the revised CTP leaves IND exempt studies as one of the provider should identify the research study and analyze four types of “deemed” studies. it under the CTP. The four types of studies that are “deemed” to have the

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What About Therapeutic Intent?

7 desirable characteristics are: 1. Studies funded by the NIH, CDC, AHRQ, CMS, DOD or VA. 2. Studies supported by a center or cooperative group funded by the NIH, CDC, AHRQ, CMS, DOD or VA. 3. Studies conducted under an investigational new drug application (IND) reviewed by the FDA. 4. Studies that are IND exempt under 21 CFR 312.2(b)(1). The second part of the qualifying clinical trial test involves meeting all three “necessary requirements.” These requirements are driven by Medicare policy. The following are the three requirements: 1. The study must investigate something that falls within a Medicare benefit category. 2. The study must have therapeutic intent and not be designed exclusively to test the toxicity of the investigational item or service or disease pathophysiology.

The most controversial requirement in the qualifying clinical trial analysis is the requirement that the study have “therapeutic intent.” The CTP says little as to what constitutes sufficient therapeutic intent, although one of the desirable characteristics is that “the principal purpose of the trial [be] to test whether the intervention potentially improves the participants’ health outcomes.” (emphasis added) In fact, CMS has stated publicly on numerous occasions that in order for the study to have sufficient therapeutic intent, one of the primary objectives of the protocol must be therapeutic benefit. The draft CRP from early 2007 proposed to allow any of the protocol’s objectives to be therapeutic benefit if the study enrolled patients with “chronic, lifethreatening, or debilitating” disease. With CMS not choosing to move forward with the expansion of their understanding of therapeutic intent and the October 17 decision memo silent on therapeutic intent issues, this presumably leaves in place the primary objective requirement. This will continue to make it difficult for Phase I drug studies to obtain coverage.

Coverage of Routine Costs &

3. Therapeutic interventional studies must enroll Investigational Items patients with diagnosed disease. During a qualifying clinical trial, Medicare covers “routine costs.” The CTP explains that it considers “routine costs” to be: 1. Items and services that are conventional care Page 2

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Client Advisory: CMS Clinical Trial Policy

2. Items and services to diagnose or prevent How to Determine Whether Items & complications Services are Covered During Research

Studies

3. The administration of an investigational item As long as Medicare covers these routine costs under normal Medicare rules, then the routine costs during a qualifying clinical trial will be covered. Some items and services that might be considered routine costs will not be covered during a qualifying clinical trial if other Medicare rules operate to exclude coverage (e.g., selfadministered drugs provided in a hospital outpatient setting).

The practical impact of the CTP continues to require providers to think through each research study uniquely and determine whether the research study meets the CTP criteria. On Page 3 we have set out a chart which provides a high-level overview of how a research study must be analyzed for coverage under the new CTP.

The revised CTP from July 2007 also clarifies that the investigational item or service will also be covered as long as the item or service being investigated would be covered outside the clinical trial. This will have a significant influence on clinical trials investigating the off-label use of FDA approved drugs. There are specific rules that allow for coverage of certain off-label uses of FDA approved drugs and if the off-label use is covered outside of the research study, then it will be covered during a qualifying clinical trial even if it is the thing being studied. This clarification also allows coverage if a local Medicare contractor’s LCD allows coverage for an item or service outside of the study but is being investigated in a trial.

1. Is the research study a proposed study or is the study already open for enrollment?

What About Devices? If a research study is a device trial and the device is being reviewed under an IDE by the FDA, then the CTP continues to defer to the IDE device trial coverage rules for Category A and Category B investigational devices. If the research is studying a device that does not have an IDE (e.g., comparing two FDA approved devices used for their labeled purposes), then the CTP is silent. It has been the practice in many jurisdictions in the country for providers to consult their local Medicare medical director for coverage approval for these types of trials that “fall through the gap” of the CTP. The decision memo issued by CMS and the revised CTP does not appear to withdraw that authority of the medical director for now.

The following are six questions that providers should ask for each research study.

If the research study is a proposed study, then the provider has an opportunity to negotiate a budget with the sponsor or request a grant. The provider can utilize the CTP rules to figure out what would be covered by Medicare if the provider received no money from the sponsor. The provider can choose to negotiate an arrangement in which the sponsor pays for the items and services that Medicare will not cover, thereby leveraging the CTP so that the research study is both compliant and financially viable. The provider must analyze the clinical trial agreement or grant to determine what the contract or grant pays and ensure that those items and services are not billed. The provider must also examine the financial discussion in the informed consent (if a patient has signed an informed consent) and be sure that the items and services promised free are not billed. 2. Does the research study qualify for Medicare coverage? If a research study does not meet the criteria for a qualifying clinical trial, then no items or services required by the study can be billable to Medicare. This includes items and services that might be considered medically necessary. Only treatment of complications is billable to Medicare during a non-qualifying clinical trial. If a research study is a qualifying clinical trial, then Medicare potentially covers items and services during the research study that are “routine costs” as well as

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the investigational item or service – as long as 1) those items and services would be covered outside the trial when provided for the same purposes; 2) the items and services are not being paid for by the sponsor (or through a grant); and 3) the items and services are not promised free in the informed consent.

considered to cover otherwise billable services and effectively exclude coverage. Billing Medicare for such services could subject the provider to false claims liability.

Providers should also be sure that the main contractual terms in the body of the contract do not contradict the 3. Which items and services are “routine costs”? compensation arrangement that serves as the budget. If a contract states that the monies the provider receives If a research study is a qualifying clinical trial, then for conducting the study covers all costs associated each item and service must be analyzed whether it is a with the study, then no items or services required by “routine cost.” Routine costs are essentially items and the protocol may be billable to Medicare. services that are provided for the clinical management of the patient enrolled in the study. If an item or service 5. What items and services are promised free in the is for research purposes only, then it will not be a routine informed consent? cost and will not be billable. An item or service will be considered a routine cost if it is conventional care Any items and services that are promised free in the for the patient’s treatment, it is being provided for the informed consent cannot be billed to Medicare, even detection or prevention of complications, or it is for the if they are routine clinical services. A number of administration of the study item or service (for example, enforcement actions and public statements by CMS in infusion of an investigational cancer drug). the past year clearly indicate that if a provider promises anything free to the patient, then the provider must live Not all routine costs are billable to Medicare. The up to that promise. routine cost must be covered by Medicare generally for the purpose for which it is provided and it is only then The “added costs” section of the informed consent is one billable if it is not being paid for by the sponsor (or of the most overlooked sections of the informed consent. grant) and not promised free in the informed consent. Providers should be careful before the informed consent is approved by the IRB that the financial promises in There is a misconception within the health care industry the informed consent document are closely scrutinized that Medicare pays for “standard of care” during research and in harmony with what the CTP allows providers to studies. This is not true. First, Medicare only pays bill to Medicare. for certain services during “qualifying clinical trials.” Second, during a qualifying clinical trial, Medicare pays Providers should be careful of language in the informed under its definition of “routine costs.” Routine costs do consents that promises that there will be no costs not equate to the “standard of care” – sometimes they associated with participating in the research study. are less than the standard of care and sometimes they Such language operates to exclude coverage of items are more than the standard of care. and services during the research study, even if the services are medically necessary. 4. What items and services are being paid for by the sponsor (or grant)? 6. Does Medicare generally cover the types of routine costs required by the study? Any item or service that is being paid for by the sponsor may not be billed to Medicare. The clinical trial Not all routine costs during a qualifying clinical trial agreement for each research study must be analyzed to are billable to Medicare. Medicare will only pay for a determine if the provider is receiving any money from routine cost if it is an item or service that is generally the sponsor for specific clinical services. covered by Medicare outside of a research study. Providers should be careful of contracts that pay for Medicare only covers items and services that are clinical research services in lump sums or in bundles “reasonable and necessary” to diagnose or treat illness at milestones. These lump sum payments could be or injury. Congress has allowed Medicare to pay for Page 5

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very few preventive care services. CMS sets out coverage rules for what Medicare considers “reasonable and necessary” in a variety of formats, including national coverage determinations (and national noncoverage determinations), a series of manuals available on the Internet, transmittals and a host of other rules. Additionally, local Medicare medical directors can issue local coverage determinations in order to fill in the gaps when national rules need more detail or if no national rules exist for an item or service. These various layers of rules must be sorted through to determine if a routine cost is covered by Medicare. Medicare coverage rules for specific items and services are not always intuitive. For example, a particular type of therapy may include a device that has been determined to be “safe and effective” by the FDA but CMS or a local Medicare contractor may not consider the device to be “reasonable and necessary” in the same situations the FDA considers the device “safe and effective.” Such a determination by Medicare does not mean that the therapy and device cannot be used as the FDA has approved it; it just means that Medicare will not pay for the item or service.

What Should Providers Do?

4. Require investigators or their study coordinators to send the following items to a central source for a coverage analysis: the protocol, the clinical trial agreement (or notice of grant award), the informed consent document, and any relevant information that supports IND status if the study is a drug trial or IDE categorization if the study is a device trial. 5. A coverage analysis should be conducted of all items and services required by a research study to determine if the items and services are billable to Medicare. The coverage analysis process uses information from the study documents listed above and applies the CTP rules to the information. 6. Develop a process for the investigator to communicate to ancillary clinical areas that the services being ordered are part of a research study. 7. Develop a process for clinical areas to know the results of a research study’s coverage analysis so they know whether to bill an item or service to Medicare or to an internal research account. 8. Develop a training program on the CTP to educate investigators, clinical area administrators, financial managers and others on what the government’s expectations are and the processes the organization has developed.

The following are suggested tasks that providers should think about implementing in a clinical research billing 9. Develop an auditing and monitoring plan as part of the provider’s compliance program to be sure that the compliance initiative. coverage analyses are being developed accurately and 1. Identify a point person who can serve as the the clinical areas or billing departments are properly coordinator of a clinical research billing compliance utilizing the coverage analysis. initiative. 10. Turn a negative into a positive – analyze a research study for coverage before the provider agrees to conduct 2. Put together a list of research studies that are being the research study. Then negotiate with the sponsor to conducted by the provider or at the provider’s facility. be sure the sponsor pays for items and services that are not billable to Medicare. 3. Develop a process to identify the patients who are enrolled in a research study in order to “flag” the patient in the provider’s registration system. If you have any questions about clinical research compliance, please contact: Ryan D. Meade at 312.498.7004 or [email protected] Michael C. Roach at 312.255.1773 or [email protected] Steven W. Ortquist at 312.285.4850 or [email protected] Page 6