CMS's Proposed Clinical Research Policy Draws Strong Industry Reaction

Proposed revisions to the clinical research policy of the Centers for Medicare and Medicaid Services (CMS; Baltimore) have elicited a strong reaction across the medical industry. While some industry members question CMS's authority to issue such revisions, others are cautiously evaluating the implications of a new self-certification process for clinical trials.

Policy Background

In September 2000, CMS changed its longstanding position of generally disallowing payments for what it deemed to be experimental treatments. Under the new policy, the agency agreed to pay for routine aspects of care for Medicare patients involved in clinical trials. While the policy change was lauded for expanding the scope of payments and including Medicare beneficiaries in clinical trials, it was widely considered to be vague and ambiguous, resulting in a great deal of confusion regarding the terms of coverage.

In June 2006, CMS said it would review the clinical trials policy with input from medical industry stakeholders and issue new guidelines. The new guidelines emerged in April of this year. Following extensive public comment on the new guidelines, CMS acknowledged the concerns of many Medicare contractors that they may have paid claims for patients in various types of clinical research that were outside the terms of the clinical trial policy. In issuing a proposed revision to the guidelines on July 9, 2007, CMS acting administrator Leslie V. Norwalk said, "This proposed decision will address ambiguities about Medicare coverage in research studies and what items and services are reasonable and necessary for beneficiaries participating in clinical research studies."

Recent Revisions

Despite extensive concerns raised during the public comment period, the July 9 decision left the policy that was unveiled in April largely intact, with two exceptions. Under the revised national coverage decision, CMS addressed the following points.

The coverage with evidence development clause stipulates that the sponsor of research must meet 13 technical and scientific standards in order to qualify for reimbursement. Under the proposal, a study's sponsor or principal investigator would need to self-certify that the trial meets the 13 standards.

Compliance may require data submission, clinical registries, and other procedures. CMS acknowledged that these steps would involve additional time and expense, but said that it would be worth the effort for sponsors and investigators since the coverage with evidence development clause would pay for costs not ordinarily reimbursed within clinical research.

Industry Reaction

Medtech industry associations AdvaMed ( Washington, DC) and the Medical Device Manufacturers Association (MDMA; Washington, DC) expressed concern about a number of issues in the new policy, particularly with regard to the coverage with evidence development clause. Teresa Lee, vice president of policy and payment for AdvaMed, characterized the July revision as a substantial improvement over the initial draft policy released in April, but added, "Our members continue to have concerns regarding CMS's legal authority in this area."

MDMA went further in voicing such concerns. Claiming that the national coverage decision's scope exceeds CMS's authority, the association called on CMS to withdraw the proposed revision. Mark Leahey, MDMA executive director, said, "CMS has long recognized that its authority to issue national coverage decisions requires that these policies apply to specific items and services. This proposed decision would address coverage of an extraordinarily broad range of items and services . . . and any effort to revise coverage for such a vast assortment of items and services would exceed the scope of a national coverage decision and must be pursued through rulemaking."

Kirk Dobbins, a reimbursement law specialist at King & Spalding LLP (Washington, DC), says, "CMS cites section 1862(a)(1)(A) of the Social Security Act for its authority in making decisions regarding coverage when evaluating evidence to whether items and services meet the reasonable and necessary standard. However, evidence-based review is not feasible for the broad range of items and services used in clinical research. Technically, a case can be made that the language in the statute does not support CMS's claims to jurisdiction here for determining coverage."

In attempting to clarify what standard-of-care services would be payable under Medicare, CMS only added to the confusion, says Andrew Ruskin, a partner in the law firm of Morgan, Lewis & Bockius LLP ( Washington, DC). And such confusion has prompted a massive response from the industry, he adds. "If the policy is finalized with the coverage with evidence development clause substantially as is, meeting these standards could significantly increase the regulatory burdens and the legal exposure associated with seeking Medicare reimbursement for medically appropriate care when the patient happens to be in a clinical trial, " Ruskin says.

Steve Phurrough, MD, director of the coverage and analysis group at CMS, is seeking to downplay concerns regarding the self-certification process. Asserting that self-certification would not be an onerous task, he said, "If you can't meet these standards, then you ought to be questioning whether you ought to run the trial." CMS plans to provide a template to streamline the reporting process. Phurrough indicated that the form could be likely completed in 250 words or less.

"On the surface, the self-certification provisions are reasonable, but like any new set of regulations . . . the devil will be in the details of implementation," says Ron Podraza, CEO of Reimbursement Principles Inc. ( Littleton, CO). Podraza notes that the current regulation covers any FDA-approved device used in clinical research to the same extent to which it is covered as a clinical treatment. "The proposed regulation looks as if it will change that in a number of potential ways, most of which are not regarded by industry as favorable compared to the current status."

Timothy P. Blanchard, a partner in the law firm of McDermott Will & Emery LLP ( Los Angeles), doesn't expect the self-certification process to place any undue burden on device manufacturers. "There are some problems with the proposed changes, particularly with CMS's potential misapplication of what constitutes ‘reasonable and necessary' costs in clinical trials," he says. "But overall, I see this as expanding coverage. Early on, there was some thinking that only publicly funded research would be reimbursable, but CMS has since assured manufacturers and Medicare contractors that privately funded studies would also be eligible."

Blanchard also notes that reimbursement for research costs associated with devices not yet approved by FDA will continue to be covered under the provisions of the investigational device exemption.

The issues surrounding the clinical research policy are far from resolved. CMS is expected to post its final decision on October 17, to be followed by yet another round of public comment.

For an overview and update on CMS policies regarding clinical research, visit www.cms.hhs.gov/clinicaltrialpolicies.

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