Medicare Qualifying/Deemed Trials: What You Need to Know

Theresa M. Shalaby, MSN, RN, CCRPManager, Clinical Trials Billing Compliance

Department of FinanceVanderbilt University Medical Center

March 22, 2013

Agenda

• Overview of Vanderbilt University Medical Center (VUMC) Research Volume

• What is Compliance?• Overview of Laws & Applicability in Research Billing

Context• Overview of Medicare Coverage Policy• Policy in Practice at VUMC• Questions

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Schools of MedicineNIH Funding – National Rankings 2011

1. Johns Hopkins2. UCSF3. U of Penn4. Wash U5. Yale6. U of Michigan7. U of Pittsburgh8. UCSD9. U of Washington

$450,715884$420,151,303$391,204,849$348,021,415$338,559,136$318,792,070$316,361,337$309,349,318$297,093,639

10. Vanderbilt11. Duke12. UCLA13. Stanford14. Columbia15. UNC16. Emory17. Baylor18. Mayo Clinic

$293,399,066$288,847,867$287,084,289$286,992,947$248,309,558$236,166,013$232,758,839 $206,772,619 $193,905,832

Vanderbilt was 24th in 2000 & 11th in 2010

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Clinical Trials are studies in human subjects to evaluate the safety and effectiveness of:

• new devices• drugs or combinations of drugs• new approaches to surgery or

radiotherapy• procedures to improve the

diagnosis of disease and the quality of life for the patient

What are clinical trials?

157 Investigators involved in active clinical trials

143 Administrative support staff

4,003 active clinical trials (protocols)

$75.1 million active clinical trial funding

1.2 million research participants

Clinical trials at Vanderbilt

Vanderbilt an Active Supporter of U.S. Clinical Trials

What is Compliance?Carrying out your daily work guided by both:

• The laws, regulations and policies which govern you, and

• Appropriate ethical standardsPreserve institutional integrity &

investigator/research program reputationCOMPLIANCE MEANS DOING THE RIGHT THING

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What is Non-Compliance?• Failure to comply with laws, regulations, protocols, informed

consent documents• May be intentional or unintentional• Serious and “continuing” non-compliance is reportable to federal funding agencies and FDA for studies subject to their oversight

• How does it happen?– Not paying attention– Lack of understanding of the rules– Decentralization– Failure to coordinate, collaborate, and communicate

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Research Billing Compliance Risks• Billing for services already paid or covered by the sponsor• Billing for services promised as free in the Consent Form• Overcharging for items/services in order to make profit• Billing Medicare for items not being billed to other patients in

a study• Waiving Co-pays as compensation for study participation• Billing for services that are clearly defined as “for research

purposes only”• Billing Medicare for services that are part of a non-qualifying

trial

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Civil False Claims Act31 USC §§3729-33

• Imposes liability against a person or entity who:– Knowingly (can be demonstrated by “reckless disregard” or

“deliberate ignorance”:• I.e.; ignore CMS or other regulations

– Submits a false claim for payment or– Uses a false record or statement to get a claim paid or approved or– Causes a third party to do either of the above

• Applies to Sponsors and Grants

• Civil Monetary Penalties: $5,000-11,000 per false claim submitted plus up to 3x damages sustained by government

• Possible exclusion from participation in federal health care programs8

How It Applies to Research Billing

• Frequency of Services Required by Protocol– Examine items & services that are “confirmatory”

these are not billable– Identify items & services unnecessarily repeated

to fit the protocol’s screening or other windows• If a patient has had a procedure that is “just outside”

the protocol window, talk to the Sponsor about using it instead of taking a billing risk of doing another test just for the protocol, or be sure that the Sponsor (or Grant) pays for that extra procedure.

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HIPAA: It’s Not Just About Privacy Anymore• Four New Health Care Related Crimes Added:

– Health care fraud– Theft or embezzlement in connection with health care

fraud– False statements relating to health care matters– Obstruction of criminal investigation of health care offense

• Expanded definition of “health benefit plan” to include commercial payers: Extends False Claims Act Penalties to Commercial payers

• Full disclosure of procedures and payers is crucial to exercise due diligence

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Federal Anti-kickback Statute42 USC §§ 1320a-7b(b)

• Felony to knowingly and willfully solicit or receive, directly or indirectly, any remuneration (anything of value) in exchange for:– Referring an individual to an entity

• I.e.; refer to VUMC for a study, get paid for it

– Purchasing, leasing, ordering any good, facility service, or item that is paid for in whole or in part by Medicare, Medicaid, or other Federal health care programs

• Penalty: 5 years imprisonment and/or $25,000 fine• BUT: Who goes to jail; the CEO, the PI, the nurse, the whole

hospital??• SO………………

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Federal Anti-kickback Statute42 USC §§ 1320a-7a(a)(7)

• CIVIL provision added in 1997• Penalty: Civil monetary penalty of $50,000

per act plus up to 3x amount of remuneration offered plus possible exclusion from Medicare

• Lower Standard of Proof• More real impact on Medical Centers

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How It Applies to Research Billing• Problematic Compensation Arrangements

– Excess compensation (over fair market value) so that residual balances can be retained

– Recruitment Bonuses/Finders Fees– Payments for services the investigator is already obligated

to perform by standards of practice– Provision of equipment to carry out the study (e.g., EKG

machines, laptops, etc) that are not returned at the end of the study. Can’t keep as part of compensation or as a gift

– “Safe Harbor” protection exists for certain arrangements such as personal service agreements, discounts equipment or space rentals do exist

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Research Billing Compliance Risks

• Billing for services already paid or covered by the sponsor• Billing for services promised as free in the Consent Form• Overcharging for items/services in order to make profit• Billing Medicare for items not being billed to other patients in

a study• Waiving Co-pays as compensation for study participation• Billing for services that are clearly defined as “for research

purposes only”• Billing Medicare for services that are part of a non-qualifying

trial

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$35,000,000Misuse of Federal Grants

$15,500,000 Inflated Research Grant Costs

$11,500,000 Cost Transfers & Effort

Reporting

$5,500,000 Effort Reporting

$5,500,000 Cost Accounting Standards &

Effort Reporting

$3,400,000 False Billing Allegations

$3,250,000 Self-Reported Costs

$2,600,000 Effort Reporting

$1,800,000 Misuse of Federal Grants

$1,200,000 Inflated Research Grant Costs

$0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000

University of Minnesota

New York University

Florida International University

Northwestern

University of South Florida

University of Alabama Birmingham

Harvard / Beth Israel Deaconess

Johns Hopkins University

George Washington University

Stanford University

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Results of Non-compliance Significant Audits/Settlements

Some examples

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Costs In Addition to Fines• Reputational Harm

– We lose the trust of the public • Additional Financial Harm

•Direct and Indirect Costs of:•Initial Investigation•Self-Disclosing•Follow Up Investigation•Negotiating Settlement & Certification of Compliance Agreement (CCA)•Satisfying Conditions of CCA

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Documents Used in Billing Audits by Government

• Protocol• Funding Information:

– Contract/Budget– Notice of Grant Award– Other Financial Sources– Allocation Through Internal Budgets

•Informed Consent•FDA Documents

•IND Application Status (drugs)•IDE Category Assignment (devices)

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Are You Scared & Confused Yet?

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Why is Medicare So Important?• Medicare is the “Driver” of reimbursement rules in the U.S.:

• Is the Gold Standard by which many commercial payers base their coverage decisions, including coverage for clinical research services

• VUMC Research Discount Rates Derived from Regional Medicare Rates to assure Fair Market Value

•Medicare has “Most Favored Nation” rule that ensures that Medicare patients enrolled in studies must be given the “best deal”

•Many States Require commercial Payers to follow rules similar to Medicare TN House Bill 837

•Sponsors expect use of Medicare rules for budgeting; creates level playing field

•47-48% of VUMC patients are Medicare Recipients: VUMC is the Number One Medicare Provider in TN

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Medicare Clinical Trials Policy• Principle billing rule for services provided during a clinical

research study: Formerly known as the National Coverage Decision

• ONLY allows billing to Medicare for items & services that are considered “routine costs” during “qualifying clinical trials” Note: These are defined terms, not ones that we set the parameters for ourselves!

• Issued by Centers for Medicare & Medicaid Services (CMS) in 2000; reviewed twice in 2007 but not revised

• Intent: To encourage Medicare beneficiaries to participate in clinical trials without penalties

http://www.cms.hhs.gov/ClinicalTrialPolicies/ 21

Side Bar: TN House Bill 837

• Enacted July 2005 • Requires any health benefit plan offered by an employer

(including managed care orgs.) to cover:– Phase I-IV Clinical Cancer Treatment Clinical Trials

approved by:• National Institutes of Health• FDA (in the form of an IND)• U.S. Department of Defense• U.S. Department of Veterans Affairs

• Trial must evaluate a drug, medical device or service that falls within a Medicare Benefit Category

• Limits coverage to those drugs, devices and services approved by FDA and are used in the clinical management of the patient22

Medicare Clinical Trials Policy: Current Wording

• “Medicare covers the routine costs of qualifying clinical trials, as well as reasonable & necessary items & services used to diagnose & treat complications arising from participation in clinical trials. All other Medicare rules apply.”

• “Routine costs of a clinical trial include all terms & services that are otherwise generally available to Medicare beneficiaries that are provided in either the experimental or the control arms of a clinical trial” with specific exceptions

http://www.cms.hhs.gov/ClinicalTrialPolicies/

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Words Matter: Just What is “Reasonable & Necessary”?

Defined in the Medicare Clinical Trials Policy, NOT by us:

• Service that the Physician would perform at the same frequency for a patient NOT in the study

• Service for which the Physician can document the medical necessity of in the medical record for every subject

• Physician will use the service or item for direct clinical management of every subject

• If yes to all 3, Medicare will cover the item or service24

Words Matter: Just What Are “Routine Costs”?

Defined in the Medicare Clinical Trials Policy, NOT by us as:• Conventional Care

• Items/services that are otherwise generally available to Medicare beneficiaries (items already covered absent a clinical trial & not otherwise excluded from coverage)

• Items/services not promised free of charge or paid for by Sponsor or Grant

• Services to detect, prevent, monitor for, or treat complications (services for patient safety) arising from the provision of an investigational drug

• Items or services required for the administration of the investigational item or device

http://www.cms.hhs.gov/ClinicalTrialPolicies/25

Words Matter: What Are NOT “Routine Costs”?

Defined in the Medicare Clinical Trials Policy, They are NOT:• The Investigational item or service (whatever is being studied) unless the

item or device would be covered outside the clinical trial• Items or services solely for research purposes (data collection, tests done

outside the standard (MEDICARE DEFINED) times that are ONLY for the study like monthly CT scans for data collection)

• Items or services solely to determine trial eligibility• Items or services paid for by the sponsor: IF SPONSOR PAYS FOR ONE, IT

MUST PAY FOR ALL OR IT’S FALSE CLAIM!• Items or services promised as free in the informed consent• Items or services lacking a Medicare benefit category• Those that fall under a national non-coverage policy

http://www.cms.hhs.gov/ClinicalTrialPolicies/26

Words Matter: Just What is a “Qualifying Trial”?

Defined in the Medicare Clinical Trials Policy:• Meets 3“necessary requirements”

AND• Satisfies Seven Desirable Characteristics

BUT• Some Trials are automatically DEEMED

Qualifying by Medicare27

Qualifying Clinical Trial: 3 Requirements

The BIG Three:1. Study must investigate an item or service that is in a

Medicare benefit category

2. Must have therapeutic intent: NOT exclusively designed to test toxicity or disease pathophysiology

3. Must enroll patients with diagnosed disease, but trials of diagnostic interventions can enroll healthy patients as controls and they will be covered

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Qualifying Clinical Trial: Seven Desirable Characteristics

The Additional 7:1. Principal purpose it to test whether the intervention potentially

improves participants’ health outcomes2. Trial is well-supported by scientific & medical information or is intended

to clarify or establish the health outcomes of interventions already in common use

3. Trial does not unjustifiably duplicate existing studies4. Trial design is appropriate to answer the research question5. Trial is sponsored by a credible organization or individual capable of

successfully executing the trial6. Trial is in compliance with Federal Regulation relating to the protection

of human subjects7. Trial is conducted according to the appropriate standards of scientific

integrity29

More on the Seven Characteristics• CMS does NOT allow Investigators to self-certify that

the seven desirable characteristics are present.

• Agency for Healthcare Research & Quality (AHRQ) has identified certain types of trials that it considers to always have these desirables and therefore deems them as qualified.

• A Deemed Trial is automatically a Qualified a trial

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Four Types of Trials Automatically Deemed Qualified by CMS

1. Funded by:• NIH (National Institutes of Health)• CDC (Centers for Disease Control)• AHRQ (Agency for Healthcare Research & Quality)• DOD (Department of Defense)• VA (Veterans’ Administration)• HCFA (Health Care Financing Administration)• CMS

2. Funded by center/groups that receive funding from the agencies above3. Conducted under an Investigational New Drug Application (IND)

reviewed by FDA4. Exempt from IND requirements (Phase II Trials)

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Big 3 +7 Desirable = Qualifying

• Remember that some Trials are also automatically deemed as Qualifying• Qualifying means that:

– Items or services during qualifying trials may be billed to Medicare– Routine costs during qualifying trials may be billed to Medicare– Conventional care is considered a routine cost BUT: Investigators must

be able to provide rationale for designation of conventional care– Investigational items /services may be paid by Medicare if a local

Medicare contractor allows coverage– Medicare has special regulations regarding Investigational devices;

undergoes separate review process (Beyond the scope of this discussion)

– If the sponsor or grant pays for any service provided to any patient, that service CANNOT be billed to Medicare

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What is a Medicare Coverage Analysis?• Thorough review of the items in the protocol and

whether they are considered billable under Medicare guidelines– Determine whether the trial is Qualified

• Thorough review of Contract or Grant• Thorough review of Consent• All must match; requiring close collaboration with

OCM, IRB, DOF-CTBC• Reviewers must have extensive knowledge of

Medicare and Billing rules

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What it Means to You In Practice• You are NOT expected to do this Analysis (GOOD NEWS!!)• BUT You are expected to:

– Be aware of the rules and why IRB, OCM, DOF-CTBC may ask you what may appear to be odd or irrelevant questions; we are doing this analysis for you

– Follow the billing guidelines set forth by the Analysis and Approved Billing Plan & Notify us of changes in the protocol

– Utilize Your Resources and Ask Questions:• Medical Center Compliance Office• Department of Finance Clinical Trials Billing Compliance• Office of Research

– Research Support Services– Office of Contracts Management– IRB (VHRPP)

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What to Do?

• Educate management, investigators, research coordinators, administrators, & all members of the research team

• Establish/Utilize Processes to:– Identify Subjects (StarPanel Patient Registration Form)– Understand Medicare Coverage Analysis

• Coordination of Contract, Grant, Consent, Billing Intention and Protocol (OCM, IRB, DOF-CTBC)

– Communicate data to charge capture and billing systems (DOF-CTBC using FACTr)

– Prevent claims for non-billable services from being sent to Medicare (DOF-CTBC)

– Perform periodic audits (DOF-CTBC)36

What to Do?

• Documentation, Documentation, Documentation….– Place Research Visit Note in Star Panel – Schedule Research Visits in Epic as Research Visits– Assure Correct Billing Coding of Items and Services Specific

to VUMC when scheduling and ordering:• V 70.7 Item is Routine Care in any Clinical Trial• V60.9 is Research Care (D&H) in any Clinical Trial

– Patient Accounting Utilizes Medicare Modifiers When Claims are Processed:

• Q0 is Investigational Service in a Medicare Qualifying Trial• Q1 is Routine Care or Service in a Medicare Qualifying Trial

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In Conclusion… Medicare has established a policy to allow payment for some

items and services in clinical trials by Qualifying them

Detailed analysis of each protocol must be done to determine whether the trial Qualifies for such payment

Significant fines are imposed for violating Medicare Policy

Research Infrastructure is dedicated to helping you navigate this complex process

You are a crucial part of the success; awareness, engagement, DOCUMENTATION and collaboration are keys to success 38

Questions

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