Research Billing Compliance | Compliance and Privacy Services | UC Davis Health

In general, for an item or service to be covered by Medicare, the item or service must fall under a Medicare benefit category and be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. The “reasonable and necessary standard”, as established in the Social Security Act (section 1862(a)(1)(A)), includes exceptions that allow Medicare payment for certain items and services, such as hospice care, some vaccines to prevent illness, and specific preventive or cancer screening services.

National and local coverage determinations are targeted policies created for some, but not all, items and services that fall under a Medicare benefit category. NCD and LCD convey the circumstances under which an item or service is considered medically reasonable and necessary as based on evidence, and, similarly, circumstances under which coverage is limited or excluded. In the absence of an NCD or LCD, items and services are covered if within a covered benefit category and documentation that the care meets the “reasonable and necessary standard” is recorded in the medical record.

Local coverage determinations are established by the region’s Medicare Administrative Contractor. LCD are often created to add clarity to an existing NCD or to add clarity about coverage or exclusions and/or limitations to coverage when an NCD does not exist. LCD may not offer coverage that conflicts with limitations or exclusions to coverage established in an NCD. When such a conflict exists, Medicare will require removal of the conflicting LCD upon discovery. If such conflicts are observed, defer to the NCD. 

The Medicare Clinical Trial Policy was established in September 2000 as the result of an Executive Order inspired by an Institute of Medicine report. The report recommended policy changes to encourage greater participation in clinical trials by older Americans to speed the development of new therapies, particularly those of benefit to seniors. The Executive Order required:

• Medicare to immediately begin reimbursement of routine patient care costs associated with clinical trials;
• Actions to increase awareness of Medicare beneficiaries of the new coverage;
• Establishment of a tracking system for Medicare patients for clinical trials;
• Implementation of practices to ensure information gained from clinical trials informs Medicare coverage decisions; and
• Determination of additional actions to promote research on areas important to seniors.

The 2000 Clinical Trial Policy was issued as National Coverage Determination (NCD) 310.1, Routine Costs in Clinical Trials, on September 19, 2000.

The Clinical Trial Policy was reassessed in 2006 to consider establishment of a certification process for qualifying clinical trials, a future process described in the original version of NCD 310.1. Public comments and enactment of the Food and Drug Administration Amendments Act (FDAAA) 2007, expanding registration and results reporting requirements for ClinicalTrials.gov, resulted in the decision that a formal certification process was not necessary. A minor edit to NCD 310.1 was added to clarify that Medicare coverage of items and services necessary to diagnose and treat complications arising from participation in a clinical trial applied not only qualifying clinical trials but to all clinical trials; however, the description of a future certification process remained.

The Medicare clinical trial policy as documented in NCD 310.1 does not supersede or override other NCD or LCD coverage, limitations to coverage, or exclusions from coverage. Specially, NCD 310.1 states:

• “Routine costs of a clinical trial include all items and services that are otherwise generally available to Medicare beneficiaries (i.e., there exists a benefit category, it is not statutorily excluded, and there is not a national non-coverage decision)….”

Items and services which meet criteria for exclusion from coverage under an NCD or LCD may not be charged to Medicare. Similarly, items and services for which no NCD or LCD exists may be charged to Medicare as a routine cost in a qualifying clinical trial only if the item or service is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member based on well documented evidence.

Since implementation of the Medicare Clinical Trial Policy in 2000, state and federal laws have similarly expanded the mandate for coverage of routine costs in clinical trials by third-party payors. These subsequent laws offer clarity that was previously lacking. Although definitions vary slightly, the laws reasonably conform to the Medicare Clinical Trial Policy which remains the standard upon which clinical trial coverage is determined.

Laws enacted subsequent to the Medicare Clinical Trial Policy:

• 2002: California Clinical Trial Law
  Private insurers and Medi-Cal (California’s Medicaid State Plan) must cover routine costs in cancer clinical trials.
• 2016: Patient Protection and Affordable Care Act (ACA)
  Insurer may not deny, limit coverage, or discriminate against a patient for participation in a clinical trial. See separate section below for more information.
• 2022: Medicaid Clinical Trial Coverage (PDF)
  Added mandatory Medicaid benefit to cover routine costs in qualifying clinical trials. Requires attestation to the appropriateness of the clinical trial. See separate section below for more information.

A comparison chart is available here:

Clinical Trial Coverage Crosswalk - UC Davis Clinical Research Guidebook - Confluence (PDF)

Requirements for billing for Category A or B IDE covered services can be found in the Medicare Claims Processing Manual, Transmittal 2955 (PDF).

Billing for Devices Used in Clinical Trials:

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) allowed Medicare payment of the routine costs of care furnished to Medicare beneficiaries in certain categories of Investigational Device Exemption (IDE) studies. Effective January 1, 2015, CMS finalized changes to the IDE regulations (42 CFR § 405 Subpart B) by adding criteria for coverage of IDE studies. Additionally, review was shifted from the local Medicare Administrative Contractor (MAC) to a centralized review and approval of IDE studies by the Centers for Medicare and Medicaid Services (CMS).

• An approval for a Category A (Experimental) IDE study will allow coverage of routine care items and services furnished in the study, but not of the Category A device itself, which is statutorily excluded from coverage.
• An approval for a Category B (Nonexperimental/investigational) IDE study will allow coverage of routine care items and services in the trial and the Category B device itself, except:
  • Category B devices provided to UC Davis Health at no charge:
    • Outpatient claims: a token charge must be reported to Medicare.
    • Inpatient claims: the Category B IDE device should not be billed.

After receipt of IRB approval and prior to beginning a clinical trial involving an investigational device, certain documentation must be submitted to:

• CMS for approval of coverage for the device study.
  • Study sponsor is responsible to obtain CMS approval.
  • See Medicare Coverage Related to Investigational Device Exemption (IDE) Studies | CMS.
  • Confirm CMS approval of IDE studies here.
    Note: Plan at least 30 days for CMS review.
    
    
• The local Medicare Administrative Contractor (MAC), to facilitate payment of claims after CMS approval.
  • Each participating site must address facilitation of payment with their local MAC.

For additional information and forms see:

• Medicare Coverage Related to Investigational Device Exemption (IDE) Studies
• Medicare Benefit Policy Manual (cms.gov) (PDF)
• Medicare Claims Processing Manual (cms.gov) (PDF)
• Investigational Devices - UC Davis Clinical Research Guidebook - Confluence

The CED mechanism allows CMS to issue a national coverage determination (NCD) which provides coverage of an item or service only in the context of a clinical study (e.g. clinical trial or clinical data collection study). CED offers a pathway for evidence development for certain items and services that are likely to show benefit for the Medicare population when the available evidence is insufficient to demonstrate that items and services are reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.

Gaps in research about health outcomes for Medicare beneficiaries may leave CMS with insufficient information to support coverage of an item or service, even if approved by the FDA. The CED mechanism allows CMS to cover costs for the item or service while also generating additional evidence related to Medicare beneficiaries who participate in an approved clinical study. Ultimately, evidence from a CED may sufficiently demonstrate improved health outcomes in the Medicare population to support an NCD such that Medicare may provide coverage for the item or service absent a clinical study.

CED Background Information:

• Medicare Coverage Document - Coverage with Evidence Development (cms.gov)

Approved CED Studies

• Coverage with Evidence Development | CMS

A patient’s participation in research may impact billing for beneficiaries with a Medicare Advantage (MA) Plan, including out-of-pocket expenses.

Bill Routine Costs in Clinical Trials for Medicare Advantage Plan beneficiaries as follows:

Identification of a significant cost service occurs infrequently. Most recently, CAR-T Cell Therapy under a CED approval met this standard from August 2019 until December 2020.

In the event a service once again meets this standard, the service will be identified in the Claims Processing Manual. Medicare covers the significant cost service itself as identified in the relevant NCD.

• Note: Patients are responsible for Medicare’s 20% outpatient co-insurance and/or inpatient deductible for the significant cost service covered by Medicare.

The Medicare Advantage Plan (MAP) covers:

• Services necessary to diagnose a condition covered by the NCD,
• Most services provided in follow-up to the NCD service(s),
• Any Medicare-covered services included in the MAP capitation rate or previously, adjusted payments, and
• Any services the MAP is already obligated to cover as a mandatory supplemental benefit under 42CFR §422.102 or due to changes in capitation rates or methodology under 42CFR §422.312.
• Note: Patients are responsible for the Plan’s standard deductibles and co-payments for costs covered by the MAP.

Medicare, not the Medicare Advantage Plan, is the primary payor for routine costs in a clinical trial that qualifies for coverage under NCD 310.1.

Medicare provides reimbursement consistent with Part A and Part B standards for routine costs in the clinical trial.

• Outpatient: Medicare is responsible for 80% of the covered cost. The remaining 20% payment is covered as described below.
• Inpatient: The applicable inpatient deductible is covered as described below.

The Medicare Managed Care Manual establishes that the Medicare Advantage Plan pays the difference between the amount paid by Medicare and the Medicare Advantage Plan’s in-network cost-sharing for the same category of items and services. The enrollee is then responsible for the standard co-insurance or copayment amounts required by their Plan. Essentially, the patient and the Medicare Advantage Plan, together, cover the amount not covered by Medicare.

To be eligible for this reimbursement by the Medicare Advantage Plan, the enrollee (or provider) must notify the Plan that the enrollee received a qualified clinical trial service and provide documentation of the cost-sharing incurred, such as a provider bill.

MCM Chapter 4 (cms.gov) (See section 10.7.1, Clinical Trials: Payment of Services)

The Consolidated Appropriations Act, 2021 (Public Law 116-260) (section 210) (PDF) amended the Social Security Act by adding a new benefit for routine patient costs for items and services furnished in connection with participation by Medicaid beneficiaries in qualifying clinical trials. This benefit applies to routine costs in a clinical trial conducted in relation to the prevention, detection, or treatment of any serious or life-threatening disease or condition. Criteria for a qualifying clinical trial and definitions of routine costs and excluded costs are specified in (Public Law 116-260) (section 210) (PDF). Excluded costs are expressly not covered and claims seeking payment for excluded costs should not be submitted to the Medicaid state plan.

Coverage for this Medicaid benefit is based on an attestation form created by the Centers for Medicare and Medicaid Services (CMS) regarding the appropriateness of the qualifying clinical trial when signed by the study’s principal investigator and health care provider and submitted to the beneficiary’s Medicaid state plan. By law, the requirement for the signed attestation form alleviates requirements to submit documentation which may be proprietary or determined by CMS to be burdensome.

The attestation form is completed at the time a Medicaid beneficiary consents to participate in a qualifying clinical trial. The signed form is submitted with the treatment authorization request and uploaded to the patient’s chart. The complete workflow, tips for completing the attestation form, and a link to the form are available in the UC Davis Clinical Research Guidebook.

The Patient Protection and Affordable Care Act, effective in 2016, included a mandate that private group health plans and health insurance may not deny or limit coverage or discriminate against an individual for participation in a clinical trial which meets criteria set forth in the law. Generally, the insurer must cover routine costs in the clinical trial consistent with the patient’s insurance plan. Items and services such as the investigational item or service itself are excluded from the mandate for coverage, leaving the private payor without obligation to cover the cost. 

The various policies and laws which allow state and federal payers to cover routine costs in clinical trials add to the complexities of healthcare billing, resulting in potential pitfalls, such as:

• Double billing or double dipping:
  • Receiving payment from a sponsor or funding source and submitting a claim to a third-party payer or Medicare for the same costs.
  • Double billing/dipping may constitute fraud and/or violate the False Claims Act.
• Charging a patient or third-party payor for items promised for free in the research informed consent form.
• Receipt of payment for non-covered services:
  Receiving payment from Medicare for a non-covered service is considered an overpayment (PDF) which must be identified and returned. Non-covered items and services include those:
  • Not used in the direct clinical management of the patient,
  • Expressly excluded from coverage as documented in a Medicare National or Local Coverage Determination, or
  • For which documentation, coding, or claims standards are not met.

Policy 1502, Charging for Research Studies, establishes a framework for compliant research billing practices at UC Davis Health. The policy, designed to mitigate the pitfalls described above, requires that a Coverage Analysis be completed before study activation for each study entered in the OnCore Clinical Trial Management System (CTMS).

The Coverage Analysis consists of two parts:

1. Determination of Study's Qualifying Status

• Investigational Device Exemption (IDE) Studies
  
  Verify Centers for Medicare and Medicaid Services (CMS) approval status: Approved IDE Studies | CMS
  
  
• Coverage with Evidence Development (CED) Studies
  
  Verify CMS approval status: National Coverage Determinations (NCD) requiring a CED.
  Note: Studies approved by CMS under the CED provision include clinical trials and clinical data collection studies or registries.
  
  
• The OnCore Qualifying Clinical Trial (QCT) Checklist (all studies):
  
  The QCT Checklist is comprised of a series of questions that document whether a study is "qualifying" or "non-qualifying” to bill routine costs in a clinical trial to a third-party payor such as Medicare or private insurance.
  
  Studies that that do not fall under a CMS IDE or CED approval which possess characteristics described in Medicare National Coverage Determination (NCD) 310.1 are determined to “qualify” to bill Medicare (or other third-party payer) for routine costs that arise from conducting the clinical trial.
  
  For detailed instruction, please refer to the OnCore QCT Checklist - UCDH Reference Guide - UC Davis Clinical Research Guidebook - Confluence (PDF)

2. Billing Grid

The billing grid is a modified study calendar or schedule of events which documents the study’s billing plan in a detailed table. The billing grid captures:

• each protocol-directed billable item or service,
• each protocol milestone at which each item or service must be provided, including conditionally required items and services (e.g. pregnancy test for women of child bearing potential), and
• the party responsible for payment of each instance of each item or service (e.g. sponsor/study or patient/insurance).

Policy 1502 requires that a billing grid include justification or rationale for coverage, to include evidence-based supporting documentation, for each routine cost billable to Medicare or other third-party payer.

The appropriate Q-modifier (PDF) is also required for each line item:

• Investigational Clinical Service: Q0
  • Items and services that are being investigated as an objective within the study.
• Routine Clinical Service: Q1
  Items and services that are:
  • covered for Medicare beneficiaries outside of the clinical research study;
  • used for the direct patient management within the study; and,
  • do not meet the definition of investigational clinical services.
• Routine clinical services may include items or services:
  • required solely for the provision of the investigational item or service(s),
  • clinically appropriate monitoring, whether or not required by the investigational item or service, and
  • items or services required for the prevention, diagnosis, or treatment of research-related adverse events.

The Medicare Claims Processing Manual (Chapter 32, transmittal 69.6) states:

“When billed in conjunction with the Z00.6 diagnosis code, the Q1 modifier will serve as the provider’s attestation 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).”

The final step in preparing the billing grid is to ensure no conflicts exist between the billing grid, informed consent form, and research agreement funding documents specific to the payer responsible for research protocol-directed charges.

A billing grid is required for all studies that result in charges in the Epic billing system regardless of payer (e.g. patient’s third-party payer(s) or study account).

Policy 1502, Charging for Research Studies, describes the required elements for a billing grid.

More information and educational resources on Coverage Analysis and billing grids are available in the UC Davis Health Clinical Research Guidebook.

• Coverage Analysis, Budgets and Contracts - UC Davis Clinical Research Guidebook - Confluence
• Research Billing Academy - UC Davis Clinical Research Guidebook - Confluence

Epic, the electronic health record system utilized at UC Davis Health, offers technical controls to support accurate research billing processes. The technical controls must be initiated as described in UC Davis Health Policy 2317, Documentation of Research Patient Status in the Electronic Medical Record. The policy requirements ensure charges for items and services provided in conjunction with research require review and, when needed, correction by research personnel before a claim may be issued to a third-party payor.

See additional information in the UC Davis Clinical Research Guidebook.

Providing protocol-directed items and services at no cost to some, but not all, study participants is generally not allowed unless the costs are waived due to the participant’s documented indigency. When costs are paid by the research sponsor for non-indigent study participants, the same items and services cannot be billed for study participants with Medicare coverage.

Indigency is documented when a patient is deemed eligible for UC Davis Health charity care discounts.

See Charity Care Screening Policy

When a patient participating in a privately sponsored clinical trial is deemed eligible for UC Davis Health charity care discounts, the protocol-directed items and services are billed to the study account and the study sponsor is invoiced to cover the indigent subject’s costs. Invoicing the sponsor in such a circumstance may require prior sponsor approval, additional budget negotiation, and/or a contract amendment.

Note: It is advised that invoiceable payment terms be negotiated in private clinical trial agreements as a contingency to cover costs in the event an indigent subject participates in the study. The payment terms negotiated with the sponsor must not be related to the subject’s insurance coverage (e.g. insurance denial), but, instead, on the subject’s status as indigent based on eligibility for Charity Care discounts.

In the event routine costs are waived (e.g. covered by the sponsor) for an indigent study participant deemed eligible for UC Davis Health charity care discounts, Medicare may continue to be billed for routine costs for the other study participants.