Health Law Advisory Bulletin

Clinical Trials Coverage – Dashed Expectations, But Stay Tuned

By Roger L. Jansson and Thomas E. Jeffry, Jr.
[July 2007]

On July 9, 2007, the Centers for Medicare & Medicaid Services (CMS) issued a revised Clinical Trial Policy (CTP) National Coverage Determination (NCD), governing what types of costs Medicare pays for individuals participating in clinical trials.

Medicare has paid for “routine costs” associated with patients enrolled in “qualifying” clinical trials since 2000 under the original CTP NCD, as long as the items and services are otherwise available to beneficiaries, are not statutorily excluded, and are not excluded by a national non-coverage decision. The CTP NCD contained a number of ambiguous provisions that appeared to limit the applicability of NCD Medicare reimbursement.

Despite promises of numerous positive revisions in CMS’ Proposed Decision Memo for CTP on April 10, 2007, the Final Memo states that comments on the Proposed Memo revealed differing views and confusion about the existing and proposed CTP NCD. In response, CMS reversed direction and decided to scale back the revisions and to simply “preserve the status quo” with the adoption of only two revisions. However, in the revised CTP NCD, CMS also announced that it will once again reopen the reconsideration of its CTP, posting yet another proposed Decision Memorandum, and also promising to propose changes to the regulations that pertain to Medicare payment of clinical trials.

The two revisions to the CTP NCD effective July 9, 2007 are:

(1) CMS modified the language in the initial CTP NCD that could be read to restrict payment for items or services under investigation, to the extent the item or service would be covered outside the clinical research trial. CMS acknowledges ambiguity on this issue, and now makes clear that items or services during clinical trials are covered if they would be covered outside the clinical research trial.

(2) CMS adopts the proposed Decision Memo’s addition of Coverage with Evidence Development (CED) to the CTP NCD. In doing so, CMS for the first time allows the NCD process to establish additional standards for approval of research trials through the CED process, for items and services in clinical trials for which there is some evidence of medical benefit but for which there is insufficient evidence to support a “reasonable and necessary” determination.

As noted above, CMS proposed much more significant changes in the Proposed Decision Memo on April 10, 2007.¹ For now, the following changes will remain on the shelf and will be reconsidered in the future:

• Renaming the policy from “Clinical Trials Policy” to “Clinical Research Policy” because the conventional definition of “clinical trial” fails to capture the scope of opportunities available to Medicare beneficiaries in clinical study participation;
  
  
• Adding a definition for the term “clinical research;”
  
  
• Continuing the seven highly desirable characteristics for good clinical research and renaming them “general standards for scientifically and technically sound clinical research study,” and adding an eighth standard requiring that each research study must have a written protocol;
  
  
• Revising the requirements that qualify clinical studies for Medicare coverage, including new Medicare-specific requirements that research studies:
  
  
  • Are registered on the National Institutes of Health (NIH) ClinicalTrials.gov website prior to enrolling any study subjects,
    
    
  • Specify and fulfill method and timing of public release of results in the study protocol, regardless of outcome or completion of trial,
    
    
  • Explicitly discuss inclusion criteria and consider relevant subpopulations in the study protocol,
    
    
  • Discuss how the results will generalize to the Medicare population so as to infer whether Medicare patients may benefit from the intervention;
    
    
• Adding a definition for “administrative services” required to carry out studies and clarifying that Medicare will not cover administrative services;
  
  
• Adding a definition for “investigational clinical services” and covering those services when the service is available to Medicare beneficiaries that are not participating in a study, or when it is required through CED;
  
  
• Clarifying those processes that ensure that both Medicare-specific standards and the general standards for scientifically and technically sound clinical research studies are met;
  
  
• Expanding the agencies which qualify for “deemed” approval status to include all studies reviewed and funded by a program with the Department of Health and Human Services, the Veteran’s Administration, or the Department of Defense;
  
  
• Removing the following options for “deeming” studies as approved for Medicare coverage of routine costs:
  
  
  • Self-certification process;
    
    
  • Investigational New Drug (IND) exempt studies.

Another unresolved issue: applicability of Medicare Secondary Payer Rules to CTP NCD

The applicability of the Medicare Secondary Payer Rules (MSP) to clinical trials in which sponsors or trial sites pay for a beneficiary’s costs in the event of complications has led to much confusion and consternation under the CTP NCD, and sparked many comments on the proposed Clinical Research Policy NCD. When it issued its Proposed Decision Memo on April 10, 2007, CMS stated that it would not address applicability of the MSP rules in the revised NCD, but CMS promised future guidance on this issue by the CMS MSP division.

CMS received many comments on the administrative barriers posed by application of the MSP rules during the Proposed Decision Memo comment period. As expected, rather than address public concern, CMS once again failed to address the MSP issue in the revised CTP NCD. It remains to be seen whether the MSP program area will provide further guidance as promised.

Footnote

1 http://www.cms.hhs.gov/mcd/viewdraftdecisionmemo.asp?id=186. The CMS Tracking Sheet recounting the entire year-long reconsideration process, starting with CMS’ July 10, 2006 announcement of its decision to significantly reconsider the CTP NCD and culminating in CMS’ decision to only make two relatively minor changes, is available at http://www.cms.hhs.gov/mcd/viewtrackingsheet.asp?id=186.

For more information, please contact:

Thomas E. Jeffry, Jr. Los Angeles, California (213) 633-6800 tomjeffry@dwt.com

This advisory is a publication of the Health Law Group of Davis Wright Tremaine LLP. Our purpose in publishing this advisory is to inform our clients and friends of recent legal developments. It is not intended, nor should it be used, as a substitute for specific legal advice as legal counsel may only be given in response to inquiries regarding particular situations. Attorney Advertising. Prior results do not guarantee a similar outcome. Thank you.

Copyright 2007, Davis Wright Tremaine LLP.

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