Reimbursement Report

Six Concepts to Navigate Manufacturer-Sponsored Clinical Trials

By Kristofer C. Munroe
July 6, 2015


• Categories: Market Access, RC - Medical Device Audits, Certification & Verification, Reimbursement Report

Seeking reimbursement from Medicare for items or services provided during a manufacturer-sponsored clinical trial requires the navigation of a complex web of regulations. It requires assistance from legal, regulatory and coding professionals. Despite the challenges, some manufacturers still elect to seek Medicare reimbursement during this type of clinical trial. Why? Because it can be a useful tool for establishing utilization and offsetting some of the cost associated with a clinical trial. For executives faced with making the decision of whether to seek reimbursement for their clinical trial, six core concepts are necessary to begin to understand the issues involved.

Medicare Will Only Pay for Certain Costs

Assuming the clinical trial meets the criteria established by CMS for Medicare payment, Medicare may be billed for routine clinical services provided during qualified clinical trials and the reasonable and necessary care arising from the provision of an investigational item or service, specifically the diagnosis or treatment of complications. Medicare cannot be billed for purely investigational clinical services or items being investigated as the trial objective. Medicare will not reimburse non-medically necessary tests or additional diagnostics outside the standard of care that are used to evaluate the items and/or services being investigated.

Medicare Will Not Pay Liabilities That Are the Responsibility of Another Insurer or Plan

The Medicare Secondary Payer Rule (MSP) provides that Medicare shall not pay for services and items that certain other kinds of health insurance is responsible for paying. Ordinarily, the MSP provisions would apply in situations where Medicare was not the beneficiary’s primary health insurance coverage. However, in a clinical trial situation, a manufacturer that sponsors a clinical study and provides care and treatment incident to the study can be viewed as a payer. Depending upon the drafting of the contracts and consent forms, a sponsor could implicate itself as a payer and prevent Medicare beneficiaries from receiving benefits. For a sponsor to not implicate itself as a payer for the routine clinical services it must not agree to pay for services “to the extent they are not covered by insurance”. 

Reporting Requirement May Attach to Sponsors Acting as Secondary Payer

When payments are made by sponsors of clinical trials for complications or injuries arising out of the trials, such payments are considered to be payments by liability insurance (including self-insurance) and must be reported. The appropriate Responsible Reporting Entity (RRE) should report the date that the injury/complication first arose as the Date of Incident (DOI). The situation should also be reported as one involving Ongoing Responsibility for Medicals (ORM). A trial sponsor’s obligation under the MSP reporting requirements attaches when a payment is made for treatment of injuries or complications experienced in the trial, not when the promise to pay for such treatment is made in an informed consent or clinical trial agreement.

Potential False Claim: Attempting to Get Medicare to Pay for Liabilities That Are Not Responsibility of Beneficiary or Another Party

The purpose of the False Claims Act (FCA) is to counteract fraudulent billing of the federal government. It allows for the filing of a case by the Government or a whistle-blower to recover, on behalf of the government, when anyone who knowingly submits claims to obtain payment of a false or fraudulent claim by the federal government. Intent to defraud the government is not required—only intent to submit the claims. Over the past few decades, it has evolved to one of the government’s primary tools for fighting healthcare fraud and abuse. At risk is treble damages per false claim, plus civil penalties of $5,000 to $11,000 per false claim.

If the study sponsor is paying for or forgiving the costs of care for some participants but still billing Medicare for others, the study sponsor is billing for a cost that has not actually been incurred. Although there are some exceptions for cost incurred by indigent individuals, in general, if the cost is forgivable and Medicare is still billed for it, the filing of such a claim likely constitutes as the filing of a false claim. Sponsors can address this issue by carefully structuring the study, contracts and consent forms. Additionally it is important that sponsors take steps to eliminate double billing for items covered by the sponsor.

Clinical Trial Sponsor May Not Pay Medicare Beneficiary Cost Sharing Amounts

A sponsor cannot provide for a beneficiary’s cost-sharing amounts in a clinical trial without triggering fraud and abuse concerns. The payment of cost sharing amounts could be viewed as an unlawful inducement. Further, it could be seen as an attempt to cause a patient in a vulnerable position to choose to participate in a potentially riskier clinical trial instead of the standard of care in order to receive reimbursement of the cost-sharing amount. However, CMS advises that “nothing in OIG rules or regulations under the Federal anti-kickback statute prohibits hospitals from waiving collection of charges to uninsured patients of limited means, so long as the waiver is not linked in any manner to the generation of business payable by a Federal health care program”.

Properly Billing Medicare Requires Coding Research and Careful Drafting

For a sponsor to effectively make a decision regarding whether to encourage providers to seek Medicare reimbursement, it must follow an evaluation roadmap. First, it must determine if the trial is a qualified clinical trial. In order to facilitate the analysis the trial must be broken into a series of events. A qualified coding expert must perform a coverage analysis to identify what items or services constitute routine clinical services and what items and services constitute investigational clinical services, while identifying coverage exceptions. If the decision is made to go forward after completing the analysis, the informed consent form, budget, contract and billing practices guide must be aligned by the appropriate professionals.

Conclusion

Failure to structure the reimbursement plan for a study can result in loss of the right to reimbursement and if the problem rises to the level of a false claim, it can result in significant fines and penalties. The process has many hoops but it also has potential rewards for a well-organized and thorough sponsor. With the help of legal counsel, coding support and regulatory support, a manufacturer can establish utilization and offset some of the costs associated with a clinical trial.  

The information in this article is provided for educational and informational purposes only. It should not be treated as legal advice and does not form an attorney client relationship.