September 25, 2000

Medi -836-00

TO: ALL MEDICARE PROVIDERS

SUBJECT: CLINICAL TRIALS

PRIMARY INTERESTS: ADMINISTRATORS, BUSINESS OFFICE MANAGERS, MEDICAL DIRECTORS

EFFECTIVE DATE: SEPTEMBER 19, 2000

The Health Care Financing Administration has instructed all Medicare contractors to issue the following information. In addition, we have attached an advance copy of Medicare Coverage Issues Manual transmittal number 126.

On June 7, 2000, the President of the United States issued an executive memorandum directing the Health Care Financing Administration (HCFA) to "explicitly authorize [Medicare] payment for routine patient care costs…and costs due to medical complications associated with participation in clinical trials." In keeping with the President's directive, this National Coverage Decision (NCD) serves to define the routine costs of clinical trials and identify the clinical trials for which payment for such routine costs should be made for eligible services furnished on or after September 19, 2000.

Clinical trial services covered by Medicare must meet both the following requirements:

1. Qualifying Trial. In order to be covered, the service must be part of a trial that meets all of the following criteria in order to be considered a qualifying trial:

a) Evaluates a Medicare Benefit. The subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category (e.g., physicians' service, durable medical equipment, diagnostic test) and is not statutorily excluded from coverage (e.g., cosmetic surgery, hearing aids).

b) Has a Therapeutic Intent. The trial must have a therapeutic intent (i.e., is not designed exclusively to test toxicity or disease pathophysiology).

c) Enrolls Diagnosed Beneficiaries. Trials of therapeutic interventions must enroll patients with diagnosed disease rather than healthy volunteers. Trials of diagnostic interventions may enroll healthy patients in order to have a proper control group.

  d) Has Desirable Characteristics. The desirable characteristics are listed in the NCD.

o Deemed Trials. Some trials are considered automatically deemed as having desirable characteristics. They include:

Effective September 19, 2000

-- Trials funded by the National Institutes of Health (NIH), Centers for Disease Control and Prevention (CDC), Agency for Healthcare Resesarch and Quality (AHRQ), HCFA, Department of Defense (DOD), and Department of Veterans Affairs (VA);

-- Trials supported by centers or cooperative groups that are funded by the NIH, CDC, AHRQ, HCFA, DOD and VA;

-- Trials conducted under an investigational new drug application (IND) reviewed by the Food and Drugs Administration (FDA); and

-- Drug trials that are exempt from having an IND under 21 CFR 312.2(b)(1) are deemed until the qualifying criteria are developed and the certification process is in place. At that time the principal investigators of these trials must certify that the trials meet the qualifying criteria in order to maintain Medicare coverage of routine costs. This certification process will only affect the future status of the trial and will not be used to retroactively change the earlier deemed status.

o Self-Certified Trials. In the future, a multi-agency Federal panel (see NCD for further details) will develop qualifying criteria that will indicate a strong probability that a trial exhibits the desirable characteristics as stated in the NCD. No trials are covered based upon self-certification at this time.

1. Routine Costs. Routine costs of a clinical trial include all items and services that are provided in either the experimental or the control arms of a trial except those listed below as not covered. Services provided to Medicare beneficiaries in both the experimental group and the control group are eligible for coverage provided that all other criteria in this instruction are met.

o The investigational item or service, itself;

o Items and services:

- For which there is no Medicare benefit category, or

- Which are statutorily excluded, or

- That fall under a national noncoverage policy.

o Items and services furnished solely to satisfy data collection and analysis needs that are not used in the direct clinical management of the patient (e.g., monthly CT scans for a condition usually requiring only a single scan);

o Items and services customarily provided by the research sponsors free of charge for any enrollee in the trial; and

o Items and services provided solely to determine trial eligibility.

o Items or services that are typically provided absent a clinical trial (e.g., medically necessary conventional care);

o Items and services required for the provision of the investigational item or service (e.g., administration of a non-covered chemotherapeutic agent);

o Items and services required for the clinically appropriate monitoring of the effects of the item or service, or the prevention of complications; and

o Items and services that are medically necessary for the diagnosis or treatment of complications arising from the provision of an investigational item or service.

This national coverage policy is based upon the authority found in §1862(a)(1)(E) of the Social Security Act (Act). It is binding on all Medicare carriers, intermediaries, Peer Review Organizations, Health Maintenance Organizations, Competitive Medical Plans, Health Care Prepayment Plans, and Medicare+Choice organizations (§1852 (a)(1)(A) of the Act).

For claims with dates of service on or after September 19, 2000, submit claims for services that meet the requirements as outlined in the final National Coverage Decision for Medicare qualifying clinical trial services by reporting the ICD-9-CM diagnosis code of V70.5 (Health Examination of Defined Subpopulations). Report this code as the third or subsequent diagnosis code not as the principal diagnosis code on the claim. Continue to code the principal diagnosis code chiefly responsible for the service.

The ICD-9 code is used to identify services that constitute medically necessary routine patient care or treatment of complications arising from a Medicare beneficiary’s participation in a Medicare covered clinical trial. Services that are provided solely to satisfy data collection and analysis needs and that are not used in the clinical management of the patient are not covered. In addition, services that are not covered by Medicare by virtue of a statutory exclusion or lack of a benefit category also may not be billed using this ICD-9 code. Finally, items and services customarily provided by the research sponsors free of charge for any enrollee in the trial may not be billed. This code will serve as your 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.)

When submitting claims with the V70.5 diagnosis code you must include in the beneficiary's medical record the following information: trial name, sponsor, and sponsor-assigned protocol number. This information should not be submitted with the claim but must be provided if requested for medical review. A copy of the signed informed consent document must also be made readily available if requested for medical review activities.

Submit separate line items for clinical trial services when the claim includes other covered services not directly related to a Medicare qualifying clinical trial.

Payment for these Medicare qualifying clinical trial services furnished on or after September 19, 2000, will be paid under current payment methodologies specific to your provider type and the service being provided. All applicable deductible and coinsurance rules apply to clinical trial services with one exception. Managed care enrollees will not be responsible for the Part A and Part B deductibles for covered clinical trials services billed as fee for service.

Where the payment is bundled (e.g., DRG payments), Medicare will later adjust amounts paid for non-covered investigational items and services for which payment should not have been included as part of the bundled payment.

Bill on HCFA Form HCFA-1450 or electronic equivalent.

Applicable Bill Types--All institutional provider bill types (inpatient and outpatient) are applicable.

When utilizing the UB-92 flat file use record type 40 to report bill type. Record type (Field No. 1), sequence number (Field No. 2), patient control number (Field No. 3), and type of bill (Field No. 4) are required.

When utilizing the hard copy UB-92 (Form HCFA-1450) report the applicable bill type in Form Locator (FL) 4 "Type of Bill."

When utilizing the Medicare A 837 Health Care Claim version 3051 implementations 3A.01 and 1A.C1, report the applicable bill type in 2-130-CLM01, CLM05-01, and CLM05-03.

ICD-9-CM Reporting.--For claims with dates of service on or after September 19, 2000, report ICD-9 diagnosis code V70.5 (Health Examination of Defined Subpopulation) as the third or subsequent diagnosis code (not as the Principal Diagnosis) when billing for a Medicare qualifying clinical trial service.

When utilizing the UB-92 flat file use record type 70, Other Diagnoses Code (Field No. 6-12) to report the ICD-9 code.

When utilizing the hard copy UB-92 report the ICD-9 code in Form Locators (FLs) 69-75 (Other Diagnoses Codes).

When utilizing the Medicare A 837 Health Care Claim version 3051 implementations 3A.01 and 1A.C1, report the ICD-9 in 2-225.A-HI04-02 through HI10-02.

When utilizing the Health Care Claim: Institutional 837 version 4010, report the ICD-9 in OTHER DIAGNOSIS INFORMATION HI02.

If a claim for a Medicare covered clinical trial service was erroneously denied for a date of service on or after September 19, 2000. The action you take to receive payment for this service depends on whether the claim was initially submitted with the clinical trial diagnosis code.

Initial Claim Did Not Include the Clinical Trial Diagnosis Code.--Submit an adjustment bill with the clinical trial ICD-9 diagnosis code. If the claim or any line item on the claim is denied, notify us (insert the telephone number for providers) that the denied service(s) on the claim was related to a Medicare covered clinical trial and, if appropriate, payment will be made.

Inadvertently Denied Claim Was Submitted With the Clinical Trail Diagnosis Code (As the Third or Subsequent Diagnosis).--Notify us that a denied service(s) on the claim was related to a Medicare covered clinical trial service and, if appropriate, payment will be made.

Payment Of Clinical Trial Services For Managed Care Enrollees.--Until Medicare capitation rates are adjusted to account for clinical trials, payment for clinical trial services furnished to beneficiaries enrolled in Medicare managed care plans will be made by the Medicare contractors that process fee for service claims. You will need to submit fee for service bills to those entities for covered clinical trial services furnished to Medicare managed care enrollees. Payment will be based on the current payment methodologies specific to your provider type and the service being provided. In addition, the Part A deductible is assumed to be met when billed on a fee for service basis for Medicare covered clinical trial services furnished to managed care enrollees.

THIS BULLETIN SHOULD BE SHARED WITH ALL HEALTH CARE PRACTITIONERS AND MANAGERIAL MEMBERS OF THE PROVIDER STAFF. NO COST COPIES ARE ALSO AVAILABLE FROM OUR WEB SITE AT riverbendgba.com

Please refer any questions to our office at (423) 755-5950.

Section 30-1, Routine Costs of Clinical Trials, creates a new section to implement new policy to cover routine costs in clinical trials. This policy is in accordance with the June 7, 2000, executive memorandum from the President of the United States to provide coverage of routine patient care costs in clinical trials.

This national coverage policy is based upon the authority found in §1862(a)(1)(E) of the Social Security Act (the Act). It is binding on all Medicare carriers, intermediaries, peer review organizations, health maintenance organizations, competitive medical plans, health care prepayment plans, and Medicare+Choice organizations (§1852(a)(1)(A) of the Act). In addition, an administrative law judge may not disregard, set aside, or otherwise review a national coverage decision issued under §1862(a)(1) of the Act. 42 C.F.R. §405.860

30-1 ROUTINE COSTS IN CLINICAL TRIALS

Effective for items and services furnished on or after September 19, 2000, Medicare covers the routine costs of qualifying clinical trials, as such costs are defined below, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in all clinical trials. All other Medicare rules apply.

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 noncoverage decision) that are provided in either the experimental or the control arms of a clinical trial except:

o The investigational item or service, itself;

o Items and services provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient (e.g., monthly CT scans for a condition usually requiring only a single scan); and

o Items and services customarily provided by the research sponsors free of charge for any enrollee in the trial.

Routine costs in clinical trials include:

o Items or services that are typically provided absent a clinical trial (e.g., conventional care);

o Items or services required solely for the provision of the investigational item or service (e.g., administration of a noncovered chemotherapeutic agent), the clinically appropriate monitoring of the effects of the item or service, or the prevention of complications; and

o Items or services needed for reasonable and necessary care arising from the provision of an investigational item or service--in particular, for the diagnosis or treatment of complications.

This policy does not withdraw Medicare coverage for items and services that may be covered according to local medical review policies or the regulations on category B investigational device exemptions (IDE) found in 42 C.F.R. §405.201-405.215 and §411.15 and §411.406. For information about LMRPs, refer to www.lmrp.net, a searchable database of Medicare contractors' local policies.

For noncovered items and services, including items and services for which Medicare payment is statutorily prohibited, Medicare only covers the treatment of complications arising from the delivery of the noncovered item or service and unrelated reasonable and necessary care. (Refer to MCM

§§2300.1 and MIM 3101.) However, if the item or service is not covered by virtue of a national noncoverage policy in the Coverage Issues Manual and is the focus of a qualifying clinical trial, the routine costs of the clinical trial (as defined above) will be covered by Medicare but the noncovered item or service, itself, will not.

A. Requirements for Medicare Coverage of Routine Costs.--Any clinical trial receiving Medicare coverage of routine costs must meet the following three requirements:

1. The subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category (e.g., physicians' service, durable medical equipment, diagnostic test) and is not statutorily excluded from coverage (e.g., cosmetic surgery, hearing aids).

2. The trial must not be designed exclusively to test toxicity or disease pathophysiology. It must have therapeutic intent.

3. Trials of therapeutic interventions must enroll patients with diagnosed disease rather than healthy volunteers. Trials of diagnostic interventions may enroll healthy patients in order to have a proper control group.

The three requirements above are insufficient by themselves to qualify a clinical trial for Medicare coverage of routine costs. Clinical trials also should have the following desirable characteristics; however, some trials, as described below, are presumed to meet these characteristics and are automatically qualified to receive Medicare coverage:

1. The principal purpose of the trial is to test whether the intervention potentially improves the participants' health outcomes;

2. 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;

3. The trial does not unjustifiably duplicate existing studies;

4. The trial design is appropriate to answer the research question being asked in the trial;

5. The trial is sponsored by a credible organization or individual capable of executing the proposed trial successfully;

6. The trial is in compliance with Federal regulations relating to the protection of human subjects; and

7. All aspects of the trial are conducted according to the appropriate standards of scientific integrity.

B. Qualification Process for Clinical Trials.--Using the authority found in §1142 of the Act (cross-referenced in §1862(a)(1)(E) of the Act), the Agency for Healthcare Research and Quality (AHRQ) will convene a multi-agency Federal panel (the "panel") composed of representatives of the Department of Health and Human Services research agencies (National Institutes of Health (NIH), Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), AHRQ, and the Office of Human Research Protection), and the research arms of the Department of Defense (DOD) and the Department of Veterans Affairs (VA) to develop qualifying criteria that will indicate a strong probability that a trial exhibits the desirable characteristics listed above. These criteria will be easily verifiable, and where possible, dichotomous. Trials that meet these qualifying criteria will receive Medicare coverage of their associated routine costs. This panel is not reviewing or approving individual trials. The multi-agency panel will meet periodically to review and evaluate the program and recommend any necessary refinements to HCFA.

Clinical trials that meet the qualifying criteria will receive Medicare coverage of routine costs after the trial's lead principal investigator certifies that the trial meets the criteria. This process will require the principal investigator to enroll the trial in a Medicare clinical trials registry, currently under development.

Some clinical trials are automatically qualified to receive Medicare coverage of their routine costs because they have been deemed by AHRQ, in consultation with the other agencies represented on the multi-agency panel to be highly likely to have the above-listed seven desirable characteristics of clinical trials. The principal investigators of these automatically qualified trials do not need to certify that the trials meet the qualifying criteria, but must enroll the trials in the Medicare clinical trials registry for administrative purposes, once the registry is established.

Effective September 19, 2000, clinical trials that are deemed to be automatically qualified are:

1. Trials funded by NIH, CDC, AHRQ, HCFA, DOD, and VA;

2. Trials supported by centers or cooperative groups that are funded by the NIH, CDC, AHRQ, HCFA, DOD and VA;

3. Trials conducted under an investigational new drug application (IND) reviewed by the FDA; and

4. Drug trials that are exempt from having an IND under 21 CFR 312.2(b)(1) will be deemed automatically qualified until the qualifying criteria are developed and the certification process is in place. At that time the principal investigators of these trials must certify that the trials meet the qualifying criteria in order to maintain Medicare coverage of routine costs. This certification process will only affect the future status of the trial and will not be used to retroactively change the earlier deemed status.

Medicare will cover the routine costs of qualifying trials that either have been deemed to be automatically qualified or have certified that they meet the qualifying criteria unless HCFA's Chief Clinical Officer subsequently finds that a clinical trial does not meet the qualifying criteria or jeopardizes the safety or welfare of Medicare beneficiaries.

Should HCFA find that a trial's principal investigator misrepresented that the trial met the necessary qualifying criteria in order to gain Medicare coverage of routine costs, Medicare coverage of the routine costs would be denied under §1862(a)(1)(E) of the Act. In the case of such a denial, the Medicare beneficiaries enrolled in the trial would not be held liable (i.e., would be held harmless from collection) for the costs consistent with the provisions of §1879, §1842(l), or §1834(j)(4) of the Act, as applicable.Where appropriate, the billing providers would be held liable for the costs and fraud investigations of the billing providers and the trial's principal investigator may be pursued.

Medicare regulations require Medicare+Choice (M+C) organizations to follow HCFA's national coverage decisions. This NCD raises special issues that require some modification of most M+C organizations' rules governing provision of items and services in and out of network. The items and services covered under this NCD are inextricably linked to the clinical trials with which they are associated and cannot be covered outside of the context of those clinical trials. M+C organizations therefore must cover these services regardless of whether they are available through in-network providers. M+C organizations may have reporting requirements when enrollees participate in clinical trials, in order to track and coordinate their members' care, but cannot require prior authorization or approval.