Understanding (And Securing) Medicare Coverage During Med Device Clinical Trials

By Edward Black, founder and principal, Reimbursement Strategies

Obtaining coverage during clinical trials should be considered as part of a comprehensive reimbursement plan, coordinated with the clinical studies and regulatory plans, all of which are necessary parts of a complete business plan.

There are distinct federal regulations regarding Medicare coverage during clinical trials.  While individual private payers may also provide coverage during clinical trials, each payer’s policy may differ. Additionally, some insurance companies may not pay for care that is delivered by an out-of-network healthcare professional, or an out-of-network hospital, if those services are not already a part of the study enrollee’s health care plan.  However, if a beneficiary joins an approved clinical trial, most health plans cannot refuse to let a beneficiary take part in the trial, or limit the study enrollee’s benefits.

Federal law requires most health insurance plans to cover routine patient care costs during clinical trials when certain conditions are met. First, the patient must be eligible for the trial. A clinical study plan explains inclusion criteria that a potential enrollee must meet in order to enter the trial, as well as exclusion criteria that would preclude participation. Secondly, the trial must be an approved clinical trial. Visit ClinialTrials.gov for complete information.   

Costs that are generally not covered are those that add additional costs for research purposes, such as extra blood tests or diagnostic imaging. In most study protocols, the organization funding the research study will cover these costs, so there is no out-of-pocket expense for a patient/participant.

Some health plans, though, are not required to cover the cost of clinical trials. These are plans that existed prior to 2010, when the Affordable Care Act (ACA) passed into law.  When these plans change specific covered benefits, such as reducing benefits or increasing costs, they will then be required to cover clinical trial costs for routine patient care. State Medicaid plans are not required to cover routine patient care costs in clinical trials.

As of September 2000, Medicare covers the routine costs of qualified clinical trials, including all items or services that are otherwise generally available to Medicare beneficiaries. These costs include conventional care, items or services required solely for the provision of the investigational item or service (e.g., administration of a non-covered chemotherapeutic agent), clinically appropriate monitoring of the item or service’s effects, the prevention of complications, and the diagnosis or treatment of a complication related to the study. These items or services are covered whether they are provided in either the experimental or the control arm of the study. Not covered are the investigational item or service, items or services done solely for data collection (i.e., not used to directly manage the patient), or items or services usually provided by the research sponsor at no charge to study participants. You may want to refer to the Centers for Medicare and Medicaid Services’ (CMS) clinical trial policies for more detailed information.

In order to receive coverage under Medicare for routine patient care costs, the study must meet all of the following requirements:

• The trial must evaluate an item or service within a Medicare benefit category.  Examples are physicians' services, durable medical equipment, diagnostic tests, etc. Excluded items and services include cosmetic surgery and hearing aids.
• The trial must have therapeutic intent and not be designed solely to test toxicity or disease pathophysiology.
• The trial’s purpose 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 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.
• All aspects of the trial are conducted according to the appropriate standards of scientific integrity.
• The study is registered with the National Institutes of Health’s (NIH) National Library of Medicine’s ClinicalTrials.gov.
• The study protocol describes the method and timing of release of results on all prespecified outcomes, including release of negative outcomes, and specifies that release should be hastened if the study is terminated early. 
• The study protocol must describe how Medicare beneficiaries may be affected by the device under investigation, and how the study results may or may not be able to be generalized to the full Medicare beneficiary population.  Generalizability to populations eligible for Medicare due to age, disability, or other eligibility status must be explicitly described. 

Clinical trials that automatically qualify for Medicare coverage include trials funded by NIH, the Centers for Disease Control and Prevention (CDC), the Agency for Healthcare Research and Quality (AHRQ), CMS, the Department of Defense (DOD), and the Veterans Health Administration (VA), or supported by centers or cooperative groups that are funded by these organizations. Trials conducted under an investigational new drug application (IND) reviewed by the FDA are also routinely covered.

For purposes of assisting CMS in determining Medicare coverage of investigation device exemption (IDE) items and services — the exemption allows the investigational device to be used in a clinical study to collect safety and effectiveness data — the FDA will place all approved IDE devices into one of two categories: 

Category A — Experimental device for which the device type’s “absolute risk” has not been established, meaning that initial questions of safety and effectiveness have not been resolved and the FDA is unsure whether the device can be safe and effective. 

Category B — Non-experimental/investigational device for which the incremental risk is the primary risk in question, meaning that initial questions of safety and effectiveness of that device type have been resolved, or it is known that the device type can be safe and effective because other manufacturers have obtained FDA premarket approval or clearance for that device type. 

The FDA notifies CMS when it notifies the IDE study sponsor that the device is categorized as either Category A or Category B. 

Category A IDE Studies — Medicare covers routine care items and services furnished in an FDA-approved Category A IDE study if CMS (or its designated entity) determines that the Medicare coverage IDE study criteria are met.

Category B IDE Studies — Medicare may make payment for a Category B IDE device and routine patient care items and services if CMS (or its designated entity) determines, prior to the submission of the first related claim, that the Medicare coverage IDE study criteria are met.

Effective Jan. 1, 2015, study sponsors seeking Medicare coverage in Category A or B IDE studies must submit to CMS a request for review and approval that includes a request letter describing the scope and nature of the study, and discussing how the interested party believes the IDE study meets each of the Medicare coverage IDE study criteria. Sponsors also must include an FDA approval letter for the IDE, the IDE study protocol, an Institutional Review Board (IRB) approval letter, National Clinical Trial (NCT) number, and other supporting materials, as appropriate. 

For each Category A or B IDE study approved for Medicare coverage, CMS will post on its coverage website the study title, the sponsor name, NCT number, IDE number, and CMS approval date. Providers participating in and seeking Medicare reimbursement for items and services in Category A or B IDE studies, prior to submitting claims, are responsible for checking the CMS coverage website to identify whether CMS (or its designated entity) has approved the study for purposes of Medicare coverage. 

With proper planning, clinical trial coverage by Medicare — and even private payers —can often be obtained, saving study sponsors thousands of dollars. This is among the many reasons that a comprehensive reimbursement plan must be fully integrated with clinical and regulatory planning to maximize efficiency, to preserve product development dollars, and to increase the likelihood of long-term commercial success.