Clinical trials and Medicare billing: Avoiding false claims liability

Participating in clinical trials can leave health care providers vulnerable to false claims liability if Medicare rules are not closely followed. This publication reviews settlements involving clinical trials, provides an overview of the applicable Medicare rules and offers concrete steps that organizations can take to avoid clinical trial-related False Claims Act liability.

Settlements involving clinical trials
The following settlements involving overbilling related to clinical trials illustrates how things can go awry, sometimes resulting in multi-million dollar losses: 

• Rush University Medical Center paid $1 million to resolve its liability for inappropriate clinical trial charges submitted to Medicare and Medicaid for services and items provided by Rush and its staff to patients enrolled in oncology clinical trials.
• Tenet USC Norris Cancer Hospital settled its civil monetary penalty liability with the Office of Inspector General (OIG) for $1.9 million after self-disclosing overbilling with oncology trials as a “reportable event” pursuant to its corporate integrity agreement requirements. Tenet disclosed that it improperly received government reimbursement for (1) items or services that were paid for by clinical research sponsors or grants under which the clinical research was conducted; (2) items or services intended to be free of charge in the research informed consent; (3) items or services that were for research purposes only and not for the clinical management of the patient; and/or (4) items or services that were otherwise not covered under Medicare’s Clinical Trial Policy.
• The University of Alabama at Birmingham agreed to pay $3.39 million to resolve its liability in two whistleblower actions brought against it alleging that false claims were submitted to the Medicare program and the National Institutes of Health in connection with clinical trials for researcher time spent on patient care when no patients had been seen and for double-billing both Medicare and the sponsor of the research grant for the same items/services. The whistleblowers were a physician formerly employed by the university and the affiliated faculty practice plan and a research compliance officer from the university.
• Emory University agreed to a $1.5 million settlement in a False Claims Act case for falsely billing Medicare and Medicaid for services the clinical trial sponsor agreed to pay (and, in some cases, actually did pay, resulting in double payment to Emory for the same service). This case was brought by a whistleblower who was a former research finance manager at Emory.

What clinical trial-related costs does Medicare cover for its beneficiaries?
As of July 9, 2007, Medicare covers the routine costs of qualifying clinical trials, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in clinical trials. The coverage requirements for routine costs of qualifying clinical trial services are contained in National Coverage Determination 310.1.

The following costs may be billable to the Medicare program:

• Items or services that are typically provided absent a clinical trial (in other words, conventional care – items and services that are otherwise generally available to Medicare beneficiaries that are covered by the Medicare program)
• Items or services required solely for the provision of the investigational item or service (for example, administration of a non-covered chemotherapeutic agent), the clinically appropriate monitoring of the effects of the item or service, or the prevention of complications
• 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

The following costs may not be billed to the Medicare program:

• The investigational item or service itself, unless otherwise covered outside of the clinical trial
• 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 (for example, monthly CT scans for a condition usually requiring only a single scan)
• Items and services customarily provided by the research sponsors free of charge for any enrollee in the trial

Billing rules for Medicare beneficiaries in qualified clinical trials
The rules for billing Medicare for items and services provided to beneficiaries who are participating in qualified clinical trials are set forth in the Medicare Claims Processing Manual, chapter 32, section 69. It is important that these claims be submitted properly to ensure correct payment consistent with Medicare rules. Accurate claim submissions include the clinical trial number, proper use of condition code 30, the correct diagnosis code to signal that the beneficiary is part of a clinical trial and proper use of research modifiers Q0/Q1, when applicable.

Steps to protect your organization

1. Educate (and regularly reeducate) staff on clinical research billing compliance
   1. the billing rules
   2. the risks and possible penalties
2. Define roles and responsibilities to ensure that qualified personnel are monitoring claims submitted to payers when patients are involved in clinical trials to avoid improper or double billing
3. Perform a Medicare coverage analysis for each clinical trial to review and map costs according to the study protocol and study budget as either routine costs or as costs billable to the study sponsors and/or a third-party payer. Establish processes for ensuring only those costs that are properly billable to Medicare are included on Medicare claims and to monitor billing and claims submission for study participants.