Alex Morillo


At a Glance  

Healthcare finance leaders should take the following steps to ensure the eligibility of a clinical study for Medicare coverage:  

  • Centralize the process of collecting and archiving all relative components, such as protocol, consent, sponsor budgets, and contracts.  
  • Establish a standard operating process from the time a provider sees a patient to how the service is documented and communicated to payers.  
  • Provide ongoing education to staff and research personnel to mitigate the risk of mistakes.  

The concept seems simple: Payers, including the federal government, should not be billed for services that have already been paid or for services that are not provided for the direct benefit of the patient.

In the world of clinical trials, however, it is much more complex. For a CFO at a health organization participating in clinical trials, the concern reaches beyond simply ensuring that the organization is paid for delivery of services. Participating in clinical trials is a significant compliance issue and will become even more complicated in 2014 when private insurers will be required to provide coverage for routine patient services delivered in clinical trials. Finance departments will need to work closely with research coordinators to ensure that the contracts with clinical trial sponsors-and the subsequent study budgets-are clear about what is covered.

Determining the eligibility of a clinical study's related tests, procedures, or interventions for Medicare coverage requires a detailed review to identify what can be paid by Medicare or third-party payers. Such a Medicare coverage analysis can be cumbersome and time-consuming, but it is essential to prevent noncompliant billing, which is subject to severe penalties as well as civil and criminal actions under the False Claims Act. Last year, a major health system paid the U.S. government $1.9 million to settle noncompliance allegations. Even private insurers could allege insurance fraud for improper billing.

Although academic medical centers account for the majority of federally funded research, community hospitals and independent clinical practices are increasingly becoming sites for trials funded by pharmaceutical and medical device companies. Even academic medical centers, with fully staffed research offices, have run afoul of regulatory agencies and paid multimillion-dollar settlements. Whether the organization is a large medical center or a small community hospital, the groundwork for determining eligibility is the same and requires a commitment from senior leadership.

There are several benefits, of course, to being a clinical research site. Patients have access to the latest therapies and state-of-the-art care at the institution. Clinicians can learn about treatments before they come to market. Institutions that offer access to clinical trials also have a competitive advantage: increased opportunities for referrals and patient volume. And private insurers pay for services not covered by the research sponsor, adding to a revenue stream.

However, it is important to understand the risks. Without a specific process, policy, and procedure in place, an organization runs the risk of an audit, a whistleblower lawsuit, significant fines, or even criminal prosecution. From the time an organization considers a trial in the institutional review board (IRB) process all the way through the study completion, thorough documentation is necessary.

First Steps

Most of the headline-grabbing judgments against healthcare providers involve incidents that occurred at the billing stage, the last step in a process that begins when an organization is initially evaluating the protocol. Every step throughout the revenue cycle-from registration and scheduling through order entry and coding-depends on the meticulous controls set in place from the beginning.

Providers should first assess whether the trial qualifies for Medicare coverage. A clinical trial should meet three criteria:

  • Its purpose should be to evaluate an item or service that falls within a Medicare benefit category (e.g., physicians' services, durable medical equipment, and diagnostic tests would be covered, while cosmetic surgery and hearing aids would not be covered).
  • Its purpose should be to improve participants' health outcomes. It cannot be a study designed exclusively to test toxicity or disease pathophysiology.
  • It will enroll patients with a diagnosed disease rather than healthy volunteers. Trials of diagnostic interventions may enroll healthy patients to create a proper control group.

In addition to satisfying these three requirements, healthcare organizations should work closely with investigators and study sponsors to ensure documentation and answer the following questions:

  • Is the principal purpose to test whether the intervention improves the participants' health outcomes?
  • Is the trial supported by available scientific and medical information, or is it intended to clarify or establish the health outcomes of interventions already in common clinical use?
  • Does the trial duplicate existing studies?
  • Is the trial design appropriate to answer the research question being asked?
  • Is the trial sponsored by a credible organization or individual capable of executing the proposed trial successfully?
  • Does the trial comply with federal regulations on the protection of human subjects?
  • Are all aspects of the trial being conducted according to the appropriate standards of scientific integrity?

Some clinical trials automatically qualify for coverage. Examples include trials funded by federal agencies, such as the National Institutes of Health, the Centers for Disease Control and Prevention, or the Veterans' Administration, among others. Other automatic qualifiers include trials conducted under investigational new drug (IND) applications reviewed by the Food and Drug Administration (FDA) and drug trials that are IND-exempt.

What's a Routine Cost?

After determining if the clinical trial has qualified, the provider should assess what services are needed to manage the participants/patients and whether they are billable to the study sponsor, a third-party payer, or the study participant. Routine costs vary by diagnosis and geographic region. A rigorous review of best practices and treatment guidelines is essential in identifying routine costs, which typically include items or services that are:

  • Provided absent a clinical trial (conventional care)
  • Required exclusively for the provision of the investigational item or service
  • Required for the clinically appropriate monitoring or the prevention of complications
  • Needed for reasonable and necessary care- in particular, for the diagnosis or treatment of complications

Services that are excluded include:

  • The investigational item or service unless otherwise covered outside the clinical trial
  • Items and services provided to satisfy data collection and analysis needs, which are not used in the direct clinical management of the patient (for example, monthly CT scans for a condition usually requiring a single scan)
  • Items and services provided by the research sponsors free of charge to enrollees

Analysts at study sites should work closely with the study sponsor to determine what care will be provided, which can take some negotiating due to varying opinions. Typically, the study objectives in the protocol or the IND letter from the FDA may help clarify study requirements. Creating a line-item budget can help distinguish between sponsor-covered care and items covered by a third-party payer, such as Medicare or the study participant. This requires a careful review of the informed consent document.

Private Insurance

Of course, not all study participants are enrolled in Medicare. Starting in 2014, private insurance companies will be required to pay for care delivered in clinical trials. Several states have already passed similar legislation. The Affordable Care Act describes "routine patient costs" that must be covered as "all items and services consistent with the coverage provided in the plan that is typically covered for a qualified individual who is not enrolled in a clinical trial," including hospital visits, imaging or laboratory tests, and medications.

National Versus Local

A Medicare coverage analysis might seem relatively straightforward if the analysis were only at the national level, but things become more complicated when considering local coverage determinations (LCDs). LCDs are written by local or regional fiscal intermediaries representing the Centers for Medicare & Medicaid Services. Many providers run into pitfalls when determining Medicare coverage at this stage in the process, where state Medicare contractors make the majority of coverage decisions. A procedure or test may be covered in New York, but not in California, for example.

A Standardized Process

Establishing a system with an algorithm of questions and a way to collect appropriate documentation is essential to the process. Some organizations use a spreadsheet template to ensure consistency from trial to trial. Although it is essential that the process be thorough and detailed, it is also important that institutions conduct this analysis as efficiently as possible to minimize the risk of study initiation delays.

During the Trial

A standard method should be used for reviewing information to determine coverage, preferably leveraging technology to create an integrated approach. Too many institutions have multiple systems, with researchers using one system to track research subjects and the institution using another system for coding and billing. Some electronic health record (EHR) companies are building Medicare coverage analysis components into their systems, which may alleviate this disparate approach.

Meanwhile, it is important that compliance and risk management play a role throughout the process, from the initial coverage analysis through the revenue cycle:

  • Patients who are study participants should be flagged and patient visits that are research-related need to be identified so charges are segregated.
  • On order sets, procedures that are covered by the protocol should be identified so they appear on the bill.
  • An appropriate coding system for diagnosis and condition is required for Medicare beneficiaries participating in a qualifying trial.
  • All bills for encounters identified as research visits should be verified prior to issuing the bill.

Recommendations

Billing compliance requires the senior finance leader to take a larger strategic and leadership role by working with other executives, such as the chief medical officer. Collaborating with researchers, setting policies for negotiating coverage with sponsors, and understanding what is considered "routine care" can all benefit from the finance leader's involvement. The finance leader should play a leading role in the organization's adoption of the following recommendations.

Centralize. Centralizing the process of collecting and archiving all the relevant components, such as protocol, consent, sponsor budgets, contracts, FDA letters, etc., can ensure consistency in the review process. Some institutions are considering developing centralized processes for conducting Medicare coverage analyses, similar to central IRB processes, which have accelerated the start of studies at many institutions.

Standardize. The organization should have in place a standard operating process that defines the service from the time a provider sees a patient to the time the service is documented and communicated to the payers. This process should also define specific standards for communications between institutional EHRs and clinical trial databases.

Educate. Research personnel should receive ongoing education. Experience and knowledge vary widely between institutions, and there is a shortage of well-trained analysts with this expertise. Providing continued education to staff may mitigate the risk of mistakes. Research and billing staff should understand regional and state differences in coverage, in particular.

Collaborate. The finance leader should work with the investigator to review the informed consent carefully to clarify costs, FDA status, visits, and procedures. He or she should also review the entire protocol, not just the schedule of events. The finance leader also should work closely with the study sponsor to differentiate between routine care and care provided by the sponsor.

Validate. Medicare and Medicaid services have to be performed for reasonable and necessary purposes. Services that are billable to payers and the sponsors should be identified, and validated documentation should be submitted with claims.

Investigate. Periodic audits should be conducted. The frequency depends on the organization's volume of studies. Generally, semi-annual audits allow for early identification of possible issues.

Clinical Trial Site Processes

Being a clinical trial site has many benefits for clinicians, patients, and provider organizations, but many potential pitfalls exist in providing appropriate documentation and billing. Organizations that are research sites should work closely with investigators to develop specific and detailed processes to ensure compliance.


Alex Morillo is program director, Medicare coverage analysis, Biomedical Research Alliance of New York (BRANY), Lake Success, N.Y. (alex.morillo@gmail.com).


 

Publication Date: Thursday, March 01, 2012

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