Medicare: What is it and How Does it Apply to Clinical Trials?

For the average person, understanding Medicare can be confusing and complicated. However, for people in the world of clinical research administration, understanding Medicare is a necessity in order to maintain billing compliance. Medicare rules are the foundation for clinical trial billing compliance, so understanding how Medicare can impact your research is crucial. To understand how Medicare impacts clinical trials, you must first understand what Medicare is, how it is broken up, and what makes a clinical trial qualified to receive Medicare coverage.

Medicare is a single-payer, national social insurance program administered by the U.S. federal government that began with the Social Security Amendments of 1965. Under President Lyndon B. Johnson, Congress enacted Medicare under the Social Security Act to provide health insurance to people age 65 and older, regardless of medical history or income. Medicare also covers people with certain disabilities, people with end-stage renal disease, and certain qualifying clinical research studies.

Medicare is broken up into four main parts: Part A, Part B, Part C, and Part D. Part A is considered hospital insurance, and covers inpatient hospital stays, skilled nursing facility care, and hospice care. Part B is considered medical insurance, and it covers certain physician services, outpatient care, preventative services, and medical supplies. Part C, also known as Medicare Advantage Plans, is a Medicare health plan offered by a private company that contracts with Medicare. Medicare Advantage Plans provide people with the benefits of Part A and Part B, while also providing added perks such as having access to health maintenance organizations or special needs plans. The final part is Part D, which provides coverage for prescription drugs. Generally, Medicare will cover items and services that are reasonable and necessary for the patient based on their signs and symptoms.

There are several Medicare rules and regulations that apply to clinical trials. Some of these rules and regulations are research-specific and some apply to all Medicare patients. The research specific rules apply to trials that Medicare determines are qualifying. In a qualifying clinical trial, Medicare will cover the routine costs associated with the study., The instructions to determine whether a trial qualifies or not can be found within the National Coverage Determination, also known as NCD 310.1. There are four base requirements in the NCD 310.1 that need to be true for a clinical trial to be considered qualifying. The first requirement is that “the subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category”. Medicare covers more than 70 categories, and these can all be found in NCD 310.1. The second requirement is that “the trial must not be designed exclusively to test toxicity or disease pathophysiology. It must have therapeutic intent”. To qualify for Medicare coverage, the purpose of the clinical trial must be to improve outcomes for patients while also gaining data to send to the FDA for efficacy and safety improvements. The third requirement is that “trials of therapeutic interventions must enroll patients with the diagnosed disease rather than healthy volunteers.” The fourth requirement is that the clinical trial must be deemed. When a clinical trial is deemed, it means that the protocol has the seven desirable characteristics as established by the NCD 310.1. Trials conducted under an IND, funded by a governmental agency, funded by a cooperative group supported by a governmental agency, and IND exempt studies are considered automatically deemed to meet the seven desirable characteristics. If any of these four requirements are not met, the clinical trial will not qualify for Medicare coverage.

If the clinical trial qualifies for Medicare coverage, researchers must follow all of Medicare’s normal rules in additional to their research rules. The research rules expand coverage. Per NCD 310.1, Medicare will cover items that would be provided absent a study, items required for the provision of the investigational item, and “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.”

Medicare can be very complicated, but understanding the basics behind how Medicare impacts clinical research studies can help researchers run their clinical trials more effectively and compliantly. For more information on Medicare and how it affects clinical trials, visit