Why Sponsors And Sites Must Prioritize Coverage Analysis In Clinical Trials
By Casey Charlton, Huron Consulting Group
Conducting a coverage analysis (CA) is a crucial step in the pre-award workflow for sites participating in clinical trials. The CA ensures compliance with Medicare regulations, determines the billing status of clinical services, and mitigates financial risks. By supporting CA, sponsors and sites can gain a competitive advantage, positioning themselves as more attractive partners and fostering stronger, more cooperative relationships. The process of completing a CA requires subject matter expertise and is a niche skill that not every site or sponsor has on its team.
Understanding Coverage Analysis (CA)
Regulatory Framework
Understanding the regulatory framework is essential for conducting a CA and what information needs to be reviewed and documented. Key components of this framework include the National Coverage Determination (NCD) 310.1 and other relevant NCDs and Local Coverage Determinations (LCDs). For example, there may be items and services that are considered standard of care by a physician that Medicare does not allow to be billed.
National Coverage Determination (NCD) 310.1
NCD 310.1, established by the Centers for Medicare & Medicaid Services (CMS), defines which clinical trial costs Medicare covers. It emphasizes the concept of "routine costs" versus "standard of care". Routine costs refer to expenses Medicare covers, which may differ from the general medical practices considered as standard care. For a clinical trial to qualify under NCD 310.1, it must have therapeutic intent, enroll subjects with the diagnosed disease, and fall within a Medicare benefit category.
Other Relevant NCDs And Local Coverage Determinations (LCDs)
Other NCDs play a role in determining coverage, and they can be specific to procedures, such as NCD 190.15 Blood Counts. Additionally, LCDs issued by Medicare Administrative Contractors (MACs) introduce regional variations in coverage, impacting what is considered a routine cost in different geographical areas. LCDs will frequently add limitations, restricting coverage.
Why Sites Need To Conduct CA
Conducting a CA is essential for sites participating in clinical trials. The site holds ultimate responsibility for billing compliance in a clinical trial. There will be local billing requirements that will differ from other participating sites in the clinical trial that need to be reviewed and assessed on an individual study basis. Although a CA’s primary purpose is for billing compliance, it is also a useful tool for budgeting because it outlines all items and services expected during the clinical trial and can be used as a communication tool for the post-award teams performing charge review, charge segregation, and invoicing. Below are the key reasons why CA is a critical component of clinical trial management and how it benefits hospitals in various aspects:
Ensuring Compliance: Sites must comply with federal billing requirements to avoid financial and legal penalties. CA helps sites understand and adhere to these regulations, ensuring that billing practices align with CMS guidelines.
Financial Planning and Risk Management: By identifying which costs insurance will cover, the CA aids in accurate budgeting and financial planning. It prevents financial losses by ensuring proper reimbursement for routine care provided during clinical trials.
Transparency and Accountability: CA provides clear documentation and justification for billing decisions, enhancing transparency for patients, sponsors, and regulatory bodies. This accountability helps maintain trust and ensures compliance with auditing processes.
Improving Patient Access: A clear understanding of coverage reduces financial barriers for patients, encouraging participation in clinical trials. This can improve recruitment and retention rates, ultimately contributing to the success of the trial.
Importance For Industry Sponsors
Sponsors are more aware of CA than they were a decade ago. Understanding the purpose of a CA is a benefit to sponsors, as their participating sites are completing this as part of the study start-up process. Sponsors should consider conducting a preliminary CA on their own when creating the study budget to understand what expenses participating sites may ask to be covered by the sponsor. Transparency and data for billing and paying sites are important to allow sponsors to make informed decisions and avoid potential audits and fines.
Budgeting and Financial Forecasting: By understanding what Medicare covers, sponsors can better allocate funding and ensure financial stability. In current industry practice, many sponsors discover coverage limitations too late in their budgeting process, during negotiations with participating sites. Sponsors should complete a thorough investigation on national billing guidelines to understand what procedures they should anticipate covering to budget smarter. Understanding the billing guidelines reduces the risk of overspending on the study budget and helps sponsors better plan their funding for future research and development.
Compliance and Risk Management: Supporting CA ensures compliance with federal regulations and reduces financial risks. Sponsors benefit from reduced liability and improved trial management. Sponsors that understand CAs have a competitive advantage by demonstrating their commitment to mitigating risk for the sites and subsequently developing stronger relationships for future studies.
Enhancing Trial Success: A thorough CA improves patient recruitment and retention by reducing financial barriers. Reducing time spent with sites over designations and whether items and services should be billed to insurance contributes to shorter activation time frames.
Prioritizing Coverage Analysis
Coverage analysis is crucial for ensuring compliance, financial planning, and patient access in clinical trials. By understanding and supporting CA, sponsors can enhance the success and regulatory compliance of their clinical trials. Sites must navigate the complexities of NCDs, LCDs, and regional variations to conduct accurate and effective CAs, ultimately benefiting all stakeholders involved.
About The Author:
Casey Charlton is a division manager at Huron Consulting Group in their clinical research managed services group, research office. Casey has 10+ years of clinical trial experience, with a current focus on pre- and post-award clinical trial administrative management. Casey’s clients include academic medical centers, non-profit hospitals, cancer centers, and foundations. She provides expertise in best practices for billing compliance and financial management of clinical trials.