To Bill or Not to Bill? Will the Revised CRP Answer The Question? By Wendy Schroeder, RN, CCRC, Banner Health Research Institute Recently the Office of the Inspector General (OIG) has begun to focus on research billing compliance giving researchers a new incentive to look closely at cost calculations for clinical research, time and effort reporting for grants, budget negotiations and third-party billing practices. Consider these settlements: 1999, University of California-San Diego and University of Washington; total settlement of $8.3 million for improper billing of experimental medical devices to Medicare.1 2000, Allegheny General Hospital settlement for $3.2 million for billing Medicare for experimental devices that were not covered. February 2003, Northwestern University settlement for $5.5 million for overstated researcher time and effort reporting on NIH-sponsored grants. April 2005, University of Alabama at Birmingham settled for $3.4 million for billing Medicare for research funded elsewhere. May 2005, Mayo Clinic settled for $6.5 million for allegedly charging the government for research unrelated to NIH grants it received. 2006, University of Connecticut settled for $2.5 million for incorrectly or overstating grant expense information in violation of the false claims act.2 On October 10th, 2002, the Boston Herald printed this story: “Beth Israel Deaconess Medical Center agreed to pay $3.2 million to settle charges the hospital wrongfully billed Medicare for experimental treatments in the late 1980s and early 1990s.”3 More recently, the liability and risks associated with clinical trial billing were highlighted when the first false claims settlement related to billing for routine services provided during clinical trials was announced in December of 2005. The one million dollar settlement acknowledged overbilling Medicare for services already paid by another entity and underbilling Medicare for services assuming that there was an alternative primary payor. In addition, “the U.S. attorney also (said) that some or all of the physician and hospital inpatient and outpatient services charged to Medicare and Medicaid were not reimbursable because they were not considered routine care associated with clinical trials.”4 This last case of false claims submissions is a key area of financial risk in clinical research and suggests that clinical trial sites should become increasingly more familiar with billing statutes, regulations and guidelines. While private insurers may have policies and coverage criteria for clinical trial services, Medicare is the largest single payor for medical services in the United States. In addition, Medicare provides the most detailed clinical trial billing guidance and enforces the most severe penalties for fraud and abuse.5 For these reasons, research billing determinations are best based on Medicare guidance. Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities and people of all ages with end-stage renal disease. In addition to inpatient hospital care, Medicare “Part A” covers care in skilled nursing facilities, as well as some hospice and home health care. Most people don’t pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working. Medicare Part B (Medical Insurance) helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary. Most people pay a monthly premium for Part B services and may also, as of January 1, 2006, opt to pay a premium to participate in the Medicare Prescription Drug Program. “Since the inception of Medicare, the Centers for Medicare & Medicaid Services (CMS) has contracted out vital program operational functions (i.e., claims processing, provider and beneficiary services, appeals, etc.) to a set of contractors known as Medicare Fiscal Intermediaries (FIs) and Carriers. Fiscal Intermediaries (FI) manage claims processing for Medicare Part A or hospital services and carriers manage claims processing for Part B, physician and outpatient insurance.”6 Collectively, they can also be referred to as Medicare contractors. The overriding statute governing Medicare billing for patient care items and services is the Social Security Act. This statute specifically states that such services must be “reasonable and medically necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member”.7 The application of this statute as it relates to clinical trial billing was further delineated by the “Category B” regulations in 1995 and the “NCD” (National Coverage Decision) in 2000. The NCD is currently under review and a final revision proposed to be renamed as the Clinical Research Policy (CRP) will be published in July of 2007. A “Frequently Asked Questions” format is presented here to facilitate the explanation of these and other pertinent Medicare regulations to answer the question: To bill or not to bill? In general, what patient care services performed as requirements of a research protocol can be billed to a third party payer? The NCD as it applies to investigational drug studies states that “routine costs” of “qualifying” clinical trials are billable so long as those costs are reasonable and medically necessary, they are generally available to Medicare beneficiaries, they are not statutorily excluded and there is no national non-coverage decision. Items and services required to administer the test article, monitor for side effects of the test article or treat complications arising from participation in a clinical trial are also covered services.8 Pharmaceutical companies sponsoring investigational new drug (IND) studies typically provide the test article free of charge. Often times, the sponsor also provides payment for frequent subject visits that exceed what would be considered “reasonable and medically necessary” for the patient’s condition. In these situations, only the services that are not already paid by the sponsor can be billed to Medicare or any other third party payer. In the proposed CRP decision memo published by CMS on April 10, 2007, the terms “clinical research”, “administrative services”, “investigational clinical services”, and “routine clinical services” are defined. The new CRP suggests coverage for investigational clinical services defined as “items and services that are being investigated as an objective within the study (ie. the investigational item or service itself)”.9 Historically, there has been confusion in the interpretation of the NCD and in fact, the transcript of committee discussions include the following dialogue,“The intent (of the NCD) was to provide coverage for those items and services that are provided outside the trial, but to exclude the item or service under investigation even if covered outside the trial…some (mistakenly) interpreted “conventional care is covered” to mean that it was covered even when it was the investigational item or service.”10 This being said, while the final CRP may cover investigational clinical services, the policy will also clearly state the caveat that the services are covered only if they are available to Medicare beneficiaries outside the context of a clinical trial or the services are provided in the context of data collection required for coverage with evidence development (CED) identified by a CED national coverage decision. These limiting criteria align the expanded coverage with the overriding statute that only reasonable and medically necessary services can be billed to Medicare. The proposed CRP will continue to suggest coverage for items and services required to administer the test article, monitor for side effects of the test article or treat complications arising from participation in a clinical trial. In addition, covered “routine clinical services” will be more clearly defined as services available to beneficiaries outside the clinical trial and services used to manage patient care. An investigational device exemption (IDE) allows an investigational device to be used in a clinical study in order to collect safety and effectiveness data required to support a Premarket Approval (PMA) application or a Premarket Notification [510(k)] submission to FDA. For purposes of assisting CMS in determining Medicare coverage for devices, the FDA will place all approved IDEs in one of two categories. Category A devices are typically novel, innovative first generation products determined to be experimental in addition to investigational. Category B devices are investigational but usually similar to another approved device type for which safety and efficacy has already been established. CMS acknowledges this FDA risk assessment and has indicated that some category B devices are eligible for coverage consideration. The final coverage decision is made by Medicare and their contractors who must authorize billing for these devices (and related patient services) prior to any claims submissions. Medicare payment may also be made for patient care services related to the use of a Category B device as well as services required to treat complications related to the device. Effective for IDE Category A device trials initiated on and after January 1, 2005, coverage for routine costs has been extended only in life-threatening situations. Section 731 of the Medicare Modernization Act (MMA) establishes criteria for such trials initiated before January 1, 2010, to ensure that the devices involved in these trials are intended for use in the diagnosis, monitoring, or treatment of a life-threatening condition. The category A device itself remains noncovered. In general, what patient care services performed as requirements of a research protocol can NOT be billed to a third party payer? The NCD of 2000 specifically states that the test article or service itself and any item or service already provided free of charge by the sponsor is not billable. As has been mentioned, the revised CRP intends to expand coverage to investigational clinical services that are otherwise available to Medicare beneficiaries or are a provision of coverage with evidence development. Items or services provided solely to collect data for the study have not been billable under the NCD. In addition, the proposed CRP does not allow coverage for “administrative services” defined as non-clinical activity, investigator salaries, protocol development, recruitment, data quality assurance, statistical analysis, dissemination of findings and study management”.9 While routine clinical services will be covered under the revised CRP, the final published guidance may or may not clearly state the intended non-coverage of “Items and services provided solely for purposes of obtaining data for study analyses that are not intended or indicated for patient management … (e.g., serial testing of a serum marker to assess the impact of the investigational item on the marker, when no clinical event justifies the assessment of that marker)”.9 While not implicitly stated in the category B regulations, the underlying principle and federal intent would indicate that investigational devices provided free of charge by the sponsor are also not billable. When the study sponsor intends to charge the investigator or facility for the device, recall that the final decision to reimburse for an investigational device and related services is not based on the FDA category B status, but rather, on the Medicare contractor review of the claim. The category B regulations state, “Medicare coverage of a non-experimental/investigational (Category B) device will be subject to the same process and criteria used by Medicare contractors when making coverage decisions for legally marketed devices. Coverage of the device is dependent on it meeting all other Medicare coverage requirements contained in the statute, regulations, and instructions issued by HCFA.”11 This is important to consider in the possible situation where a test article has been deemed a category B device by the FDA, but the procedure required to implant or use the device is not recognized as a Medicare benefit category. As an example, realize that a laser catheter may be given a category B designation by the FDA because it looks and works like other laser catheters. But, this investigational catheter used in a cosmetic surgery procedure is not billable because cosmetic surgery is not considered a Medicare benefit category. In another case, this same investigational laser catheter may be used in a completely “experimental” procedure that may not qualify for Medicare coverage. For this reason, it is critical to notify the Medicare contractor of any intent to bill the device and billable patient care items and services provided in the context of a clinical trial. Claims for these services should not be submitted until the contractor authorizes such billing. You can search for IDE claims submissions guidance posted by your contractor in the CMS coverage database on line @ www.cms.hhs.gov/mcd/search.asp and you can obtain your Medicare contractor’s toll-free phone number at www.cms.hhs.gov/MLNGenInfo.
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