Billing 3 rd Party Payors for Services as part of Clinical Research

1. Billing 3rd Party Payors for Services as part of Clinical Research Presented by OCRA to the Research Committee March 3, 2010

2. Background of CMS Clinical Trials Policy National Coverage Determination (NCD) • June 7, 2000 Executive Memorandum by President Clinton requiring Medicare to pay for “routine Care Costs” in clinical trials • HCFA implemented a Clinical Trial NCD on September 9, 2000, with trial eligibility requirements & new coding & modifier requirements for clinical trial services billed to Medicare under the NCD (modifers QV, QR & QA) • 2006—2008: CMS reconsiders the Clinical Trial Policy NCD; no substantive changes, despite some unresolved issues • Beginning January 1, 2008 the modifiers used for routine care costs for outpatient services are changed from QV, QR and QA and to Q0 and Q1

3. Clinical Trial Policy NCD – What Changed in 2000 from existing law • Prior to NCD 2000 - if a service or item in the study is itself non-covered, all services in the trial are also non-covered • NCD 2000 - Medicare covers the Routine Costs of Qualifying Clinical Trials, and reasonable & necessary items & services used to diagnose & treat complications arising from participation in all clinical trials • Difference = services that are non-covered in the trial no longer render all services non-covered

4. Categories of Items & Services • Pure Research: services performed solely for research on normal volunteers, control subjects and patients who would not otherwise be hospitalized or receive ambulatory items or services except for their participation in this research study. All associated costs are the responsibility of the PI through sponsor, department or other funds (industry, grants etc). • Routine Care in Clinical Research: services performed as part of the established or usual standards of care of the patient. Results from these services are used for research purposes as approved in the IRB protocol & identified in the Schedule of Events. All associated costs are responsibility of the third party payor or patient as described in the study consent form. • Standard of Care: conventional care given to patients entirely unrelated to a clinical trial

5. Criteria for “Qualifying Clinical Trial” Any clinical trial receiving Medicare coverage of routine costs must meet the following three requirements: 1. The subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category. 2. The trial must not be designed exclusively to test toxicity or disease pathophysiology. It must have therapeutic intent. 3. Trials of therapeutic interventions must enroll patients with diagnosed disease rather than healthy volunteers. Trials of diagnostic interventions may enroll healthy patients to have a proper control group.

6. Desirable Characteristics The 3 requirements above are insufficient by themselves to qualify a clinical trial for Medicare coverage of routine costs. The following desirable characteristics should also exist. Some trials, as described below, are presumed to meet these characteristics and are automatically qualified to receive Medicare coverage: • Funded by NIH, CDC, AHRQ, DOD, VA • Supported by centers or cooperative groups that are funded by NIH, CDC, AHRQ, DOD, VA • Conducted under an investigational new drug application (IND) reviewed by the FDA or exempt from having an IND under 21 CFR 312.2(b)(1). • lawfully marketed drug, • not for new indication, • not for new labeling, • not new route of administration or dose, • not for new advertising, • does not alter risks, • conducted under IRB review

7. Desirable Characteristics (con’t) • 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 being asked in the trial; • 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; and • All aspects of the trial are conducted according to the appropriate standards of scientific integrity.

8. How to Determine Coverage – Evaluation Points Evaluation Points to determine if costs of a trial are coverable: • Is the clinical trial a qualifying trial? • FEASIBLITY FORM • Are the services & items routine costs? • BUDGETED SCHEDULE OF EVENTS • Are the routine costs reasonable & necessary, i.e. are they generally covered by Medicare outside a clinical trial • FEASIBLITY FORM & Education of Investigators and Staff

9. What are Routine Costs Routine costs in clinical trials include services & items: • Where a benefit category already exists • Typically provided absent a clinical trial & coverable by Medicare outside a clinical trial • Provided in either the experimental or the control arm of a clinical trial • Needed for the provision of the investigational item or service (e.g. surgery to place an investigational device); monitoring of the effects of the item or service or the prevention of complications • Required for the reasonable & necessary care arising from the provision of an investigational item or service, specifically the diagnosis or treatment of complications

10. What Routine Costs are Excluded? Routine costs in clinical trials EXCLUDED services & items: • Services & Items that are investigational or “Pure Research” and therefore coved outside of the trial • Statutorily excluded • For which there is a national NON-COVERAGE decision • That satisfy only data collection & analysis needs where they are not used in direct clinical management of the patient • Paid for by an external funding agency free of charge for enrollees of the trial

11. Medicare Coverage Regulations for Investigational Device Exemption (IDE) are different • Devices must be identified as either Category A (experimental) or Category B (proven technologies that have had questions about its safety and effectiveness resolved. • Providers that participate in an IDE trial and anticipate filing Medicare claims must notify the Medicare Administrative Contractior (MAC), Highmark, to approve the study as a Qualifying Trial

12. Managing Research Billing Compliance What does Clinical Research Billing Compliance Involve? Pre-Award: OCRA • Identifying clinical research services that can or cannot be billed to third-party payors • Harmonizing relevant portions of study documents (Contracts, study budgets, protocols, informed consent, etc) • Distinguishing among payors: Medicaid, Medicare, private managed care & private insurance and their varying contracts Post Award: UH & UPA Patient Accounts • Ensuring processes are in place to bill to third-party payors only services that can appropriately be billed

13. Coordination of Research Billing Compliance Coordination is Critical to achieve Compliance: Pre-Award: OCRA • Determination of QualifyingTrial status • Concise Schedule of Events: distinguishing between routine care in clinical research & pure research • Identifying services already paid for in grant/contract vs. those services that can & should be billed to third-party payors • Financial disclosure language of the study’s informed consent: what is said to patients/subjects about their own payment obligations Post Award: UH & UPA Patient Accounts • Identifying patients who are research subjects receiving both routine care in research and/or pure research services & items • Capturing Dates of Service where routine care in research is provided with or without pure research • Distinguishing between beneficiaries/enrollees of Medicare, Medicaid, private insurance & managed care

14. Consequences of non-compliance in Research Billing • Billing for services that are already paid by the sponsor (double billing) • Billing for services promised free in the informed consent • Billing for services that are for research purposes only • Billing for services that are part of a non-qualifying clinical trial • Billing for services in device trial in which no intermediary or carrier has approved billing under the Category A & Category B device rules Other Consequences to Consider… • Loss of community trust and damaged reputation with industry • Staff time lost by correcting billing errors • Financial penalties – FDA & regulatory sanctions • Potential endangerment of federal funding and federal health care programs • Civil enforcement actions (qui tam suits) • Corporate Integrity Agreements • Criminal prosecution and fines

15. False Claims Settlements • Northwestern University 5.5 million settlement • Johns Hopkins 2.6 million settlement • University of Louisville Review 1,151 studies • Beth Israel Deaconess 3.2 million settlement • Medical College of Georgia 6.1 million settlement • UCSD 4.7 million settlement • Mayo Clinic 6.5 million settlement • University of Alabama 3.4 million settlement • Yale University 7.6 million settlement • Rush University 1.0 million settlement • Cornell University 4.3 million settlement

16. What are the possible obstacles? • Division between billing systems of hospital & faculty practice • Division between pathology, radiology, anesthesiology & general facility billing systems • Divisions among various departments fee schedules for professional services • Lack of coordination between PI/Study Team who prepare & negotiate the budget & staff who bill for the items & services • Overuse of assignment of pure research as routine care in clinical research • Incentives created by grant/contract residual practices for PIs to bill services to third-party payors, and not to research accounts • NIH & private sponsors refusal to fully fund pure research services that cannot be billed to third-party payors • Inability to distinguish research vs. non-research patients at time of service

17. What are the possible solutions? • Develop a database of all research studies performed at UH & by UPA – distinguish between interventional and observational studies • Require coverage analyses before research study budget has been negotiated in order to determine whether the study is financially viable • Require coverage analyses that determines “billability” of trial-related items & services, before billing for services is done • Develop a database of patients who are enrolled in the research studies; identify at time of registration √ √ √ √ E-REG

18. What are the possible solutions? (cont’d) • Mechanisms to distinguish among payors, if payment policies among payors differ in the same trial • Establish safeguards to ensure that claims are appropriately directed to either an internal research index or to third-party payor • Establish process to apply required codes & modifiers to Medicare/Medicaid services & items that are routine costs in clinical research • Develop an education program for investigators, study coordinators & billing staff • Develop an auditing and monitoring program that samples billing for services during research studies

19. Who are the Stakeholders? • Principal investigators, coordinators and research teams • UH Billing Staff • Admitting Services, including point of service, i.e., UH Admitting, DOC, ACC and Radiology, Laboratory, Advanced Imaging

20. CMS Manual • Procedures for Providers Billing Routine Costs of Clinical Trials: • Claims with dates of service after January 1, 2008: • Inpatient Clinical Trial Claims: • Diagnostic code V70.7; and • Condition code 30 regardless of whether all services are related to the clinical trial or not • The Category A IDE device shall not be reported on institutional claims since it is non-covered by Medicare • Billing for Category B IDE claims, providers must first notify the MAC of the IDE device trial before submitting claims for Category B IDE devices and the routine costs of clinical trials involving Category B IDE devices. Once the MAC notifies the provider that all required information for the IDE has been furnished, the provider may bill Category B IDE claims. Both the Category B IDE device and the routine costs associated with its use are eligible for payment under Medicare. • For the billing of Category B IDE devices, institutional providers must bill the number on a 0624 revenue code line with charges in the covered charges field. Hospital inpatient providers should not bill for the Category B IDE device if receiving the device free of charge

21. CMS Manual (cont’d) Outpatient Clinical Trial Claims: • Note: The Q1 modifier is line item specific and must be used to identify items and services that constitute medically necessary routine patient care or treatment of complications arising form a Medicare beneficiary’s participation in a Medicare-covered clinical trial. • Items and services provided solely to satisfy data collection and analysis needs not used in the clinical management of the patient are not covered and may not be billed with the Q1 modifier. Items and services that are not covered by Medicare by virtue of a statutory exclusion or lack of a benefit category also may not be billed using Q1 modifier. • Institutional providers billing clinical trial claims that contain both clinical trial line item services and non-clinical trial line item services must bill HCPCS modifer Q1 only on line items related to the clinical trial; and • Diagnosis code V70.7 (examination of participant in a clinical trial) • reported as a secondary diagnosis condition code 30, the service is a therapeutic clinical trial service • Diagnosis code V70.7 as the primary diagnosis for a diagnostic trial volunteer

22. CMS Manual (cont’d) • All services on the claim related to the trial or claims that contain only clinical trial line item services do not have to report the routine modifier Q1. The presence of a condition code 30, along with the absence of the Q1 modifer is the provider’s attestation that all line item services on the claim are routine clinical trial services • When the provider uses the Q1 modifier with the V70.7 diagnostic code they are attesting that the service meets the Medicare coverage criteria; i.e. was furnished to a beneficiary who is participating in a Medicare qualifying clinical trial and represents routine patient care, including complications associated with qualifying trial participation.

23. CMS Manual (cont’d) • The Category A IDE device shall not be reported on institutional claims since it is non-covered by Medicare • Category B IDE device must be billed on a 0624 revenue code line, institutional providers must bill the following for Category B IDE devices for which they incur cost: • Category B IDE device HCPCS code, if applicable • The appropriate HCPCS modifier Q0 • The Category B IDE number • Charges for the device billed as covered charges • If the Category B IDE device is provided at no cost, OPPS providers must report a token charge in the covered charge field along with the HCPCS modifier appended to the procedure code that reports the service to furnish the device, instances when claims processing edits require that certain deices be billed with their associated procedures. • NOTE: Providers can begin to report an 8-digit clinical trial number as of April 1, 2008 on a voluntary basis.

24. CMS Manual (cont’d) • Procedures for Practitioners Billing Routine Costs of Clinical Trials: • Claims with dates of service after January 1, 2008: • HCPCS modifier Q1; and • Diagnosis code V70.7 reported as the primary diagnosis providing services to a diagnostic trial volunteer • Q1 modifier billed with V70.7 diagnosis code as a secondary diagnosis is considered as services having been provided as a therapeutic clinical trial service • Procedures for Practitioners Billing Category A Device of Clinical Trials: • Claims with dates of service after January 1, 2008: • Practitioners will bill a Q0 modifier for investigational clinical service provided in a clinical research study that is an approved clinical research study • the IDE number