Billing for Clinical Trials: It’s All in the Details

1. Billing for Clinical Trials: It’s All in the Details Joan A. Kavuru, J.D. Director of Compliance The Brody School of Medicine

2. Overview • Importance of Accurate Billing • Billing for Drug Trials • Billing for Device Trials • BSOM ECU Policies and Practices • Changes on the Horizon • Case Studies

3. Importance of Accurate Billing • Reduce risk of inappropriate billing • Billing patients for items or services promised as “free” • Billing third party payors for items or services paid for by the grant or sponsor • Ensure full cost recovery related to the performance of clinical trials • Knowing what you can bill for will expose the gaps in reimbursement (i.e., what the sponsor should pick up in costs) • Preserve institutional integrity and investigator/study coordinator reputation

4. Billing for Drug Trials: Background • Before Medicare’s National Coverage Decision on Routine Costs in Clinical Trials (“Clinical Trials NCD”): • “Routine costs” for known investigational services were denied coverage even if standard of care • “Routine costs” for unknown investigational services were paid • Much left to discretion of local Medicare carriers • Clinical Trials NCD issued in September, 2000 to “clarify” which services/items were reimbursable under Medicare • Rush University Medical Center Settlement: December 2005 • Self-disclosure: Settled for $1 million with U.S. Attorney’s Office for inappropriate billing for services provided during clinical trials • CMS Q&As Issued February 2006 • Reconsideration Notice: July 10, 2006 • Anticipated Final Revisions: July 2007

5. Billing for Drug Trials (cont’d) Necessary Items/Information for Determining Proper Reimbursement: • Who is the payor for non-investigational services • CMS may have different rules than commercial payor • Clinical Trial Agreement/Budget • Determine what services/items are to be paid for by sponsor • Protocol • Each item or service provided under protocol must be analyzed • Informed Consent • Very important to ensure consistency between CTA, informed consent and protocol • Which (if any) items/services are promised to subject without charge

6. Billing for Drug Trials (cont’d) Clinical Trials NCD • Medicare covers “routine costs” of “qualifying clinical trials” if: • Item/service is not otherwise excluded from coverage • Item/service has not been promised free of charge to subject • Item/service is not being paid for by the sponsor • Qualifying Clinical Trial • Must satisfy the three necessary requirements AND • Be “deemed” by CMS to meet the “seven desirable characteristics”

7. Billing for Drug Trials (cont’d) Clinical Trials NCD: The Three Necessary Requirements • Subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category (e.g., physician’s service, durable medical equipment, diagnostic test) that is not statutorily excluded from coverage (e.g. cosmetic surgery, hearing aids). • The trial must have therapeutic intent. The costs of trials designed exclusively to test toxicity or disease pathophysiology are not covered. • Must be primary objective • Look to protocol (may sort objectives into primary and secondary objectives) • Informed consent (make sure informed consent does not negate therapeutic intent identified in protocol’s primary objectives) • Investigator initiated trials and Phase I drug studies may be problematic • CMS has stated that it is the responsibility of the local contractor to determine therapeutic intent. • Study must enroll subjects with diagnosed disease; cannot use healthy volunteers. • For diagnostic intervention trials, may enroll healthy subjects to form a proper control group.

8. Billing for Drug Trials (cont’d) • Study must be “deemed” to meet 7 “desirable characteristics” • Initially, under the Clinical Trials NCD, a trial could meet these characteristics by either a “self-certification” process or by being “deemed” to meet such characteristics. • The self-certification process was never developed • Thus, trial must be “deemed” to meet such 7 characteristics • Clinical trials that are deemed to meet 7 desirable characteristics: • Funded by the AHRQ, CDC, CMS, DOD, VA, NIH; • Supported by centers or cooperative groups that are funded by the AHRQ, CDC, CMS, DOD, NIH, OR VA; or • Conducted under an IND application reviewed by the FDA.

9. Billing for Drug Trials (cont’d) • Drug trials exempt from having an IND under 21 CFR 312.2(b)(1) are automatically qualified until qualifying criteria are developed • Sponsors of IND and IND-exempt trials must identify themselves by email to clinicaltrials@cms.hhs.gov for administration, payment, and program integrity purposes.

10. Billing for Drug Trials (cont’d) • If fail to meet 3 necessary requirements or be “deemed” to satisfy 7 desirable characteristics: • Will not be considered a “qualifying clinical trial” • Items and services required by study protocol (even if standard of care) will not be eligible for Medicare coverage • Exception for treatment of complications arising from delivery of non-covered item or service and unrelated reasonable and necessary care – will be covered even if non-qualifying trial.

11. Billing for Drug Trials (cont’d) Routine Costs • “Routine costs” are covered if trial is considered a “qualifying clinical trial” • No specific definition: More by example • Include all items and services in the trial that are otherwise generally available to Medicare beneficiaries • More akin to “medically necessary” than what is routine to a particular provider’s practice

12. Billing for Drug Trials (cont’d) Routine Costs • CMS examples of routine costs: • Items/services typically provided absent a clinical trial • Items/services required solely for the provision of the investigational item or service (e.g. administration of an investigational drug), the clinically appropriate monitoring of the effects of the item/service, or the prevention of complications • Items/services needed for reasonable and necessary care arising from the provision of an investigational item or service; in particular, for the diagnosis or treatment of complications. • Federal Agency for Healthcare Research and Quality maintains a National Guideline Clearinghouse at www.guidelines.gov • Contains conventional care pathways for medical specialties and diseases • “Conventional care” used by CMS in lieu of “standard of care”

13. Billing for Drug Trials (cont’d) Non-Routine Costs CMS examples of non-routine costs: • Investigational item or service itself • Items and services provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient • Items/services customarily provided by the research sponsors free of charge for any enrollee in the trial

14. Billing for Device Trials • In 1995 coverage was approved for “Category B” devices (i.e., those that are non-experimental/investigational) and currently those devices may be covered under Medicare if other requirements are met. • Intent of new policy was to enhance data collection related to investigational devices and increase access of such devices to Medicare beneficiaries. • Medicare Modernization Act extended coverage to certain Category A devices (experimental/investigational) when the subject is suffering from a life-threatening condition. • This coverage only applies to the routine costs of the device trial and not to the device itself.

15. Billing for Device Trials (cont’d) • Once a determination is made as to the coverage of the device, all other associated services of the clinical trial are covered. • Can analyze coverage of associated costs under same criteria used for routine costs. • All other Medicare coverage requirements must be met (e.g., not statutorily excluded, medically necessary, etc.)

16. BSOM Procedures Financial Services Review Form • Note procedure/test/service, visit #, standard of care (paid by 3rd party payor), paid by sponsor, comments • “Standard of care column” • If Medicare/TRICARE, cannot be checked unless the trial is a “qualifying clinical trial” • If the trial is a “qualifying clinical trial” must be a “routine cost” to check column • Should be completed upon initial review/approval by UMCIRB and institutional approval Participant List • Completed at initial approval and updated as subjects added/dropped All forms can be accessed from BSOM Office of Compliance website or UMCIRB website

18. CMS Reconsiders Clinical Trials NCD • May include trials beyond those primarily for therapeutic intent • Expand into Phase I trials if disease is chronic, life threatening or debilitating • May expand policy to include trials involving healthy volunteers • Especially those populations who are at high risk for a particular disease • Protocol to require method and timing of public release of results • Include all government agency funded trials

19. Case Scenario #1 Is this a qualifying clinical trial? • NIH funded multicenter clinical trial is testing the use of a drug to help prevent onset of Type 2 diabetes in adults who are at high risk of acquiring such disease. Trial is enrolling otherwise healthy adults who meet inclusion criteria (family history, BMI exceeds X, etc.).

20. Case Scenario #2 Is this a qualifying clinical trial? • Multicenter trial sponsored by Glaxo-Smith-Kline enrolling adults who have been diagnosed with asthma and trial is studying drug under IND application for prevention of acute asthmatic attacks.

21. Case Scenario #3 Is this a qualifying clinical trial? • NIH funded multicenter trial is enrolling lung cancer patients to study fluid drained from thoracentesis to determine what types of abnormalities the cells in that fluid exhibit.

22. Case Scenario #4 Are these routine costs? • New Medicare patient comes to clinic for evaluation of diabetes. During the history and exam, it becomes apparent that patient meets inclusion criteria for diabetes study. Patient is enrolled in study at such visit. Can office visit be billed as a new patient visit to Medicare?

23. Case Scenario #5 Are these routine costs? • Patient who is suffering from metastatic lung cancer is enrolled in trial testing a new chemotherapy drug. Study requires CT scan every 6 months. Conventional care dictates that this type of patient would receive CT scan every 6 months. Is the CT scan a routine cost and thus covered by Medicare? What if the CT scan was paid for by the sponsor? • What if study ends and PI decides to independently follow his patients after the study and continues to order q 6 mo. CT scans – are these routine costs? Who is liable for payment?

24. Reporting Incidents of Noncompliance • Encouraged to use supervisors, administrators as the first line of reporting of any known incidents of noncompliance. • BSOM Compliance Hotline • Available 24 hours a day, 7 days a week • Can be anonymous • Toll free 1-866-515-4587 • No retaliation for good faith reporting of incidents of noncompliance. • All good faith reports will be fully investigated. • Confidentiality maintained to the fullest extent possible.

25. Office of Compliance at BSOM • Serves as a resource to all faculty and staff • Contact information: • 744-5200 • kavuruj@ecu.edu