Overview of Spectrum Health Financial Feasibility Principal Investigator Training August 2010

Objective The Goals of Today’s Training To introduce the Feasibility Review Process What is a Feasibility Coverage Analysis? Why should Spectrum Health conduct the analysis? What are the benefits of the analysis? To build a basic understanding of Medicare’s research billing rules Centers for Medicare and Medicaid Services (CMS) Clinical Trial Policy (CTP) CMS IDE Device Billing Regulations The Goals of Today’s Training

Agenda Outline the Feasibility Coverage Analysis (FCA) Explain CMS Guidance on Reimbursement for Clinical Trials Describe Medicare’s Approval Process for Investigational Device Trials Describe Spectrum Health’s Plan for Compliance with Medicare Regulations for Clinical Research

The Feasibility Coverage Analysis (FCA) A feasibility coverage analysis is a systematic review of protocol-related documents to determine if all the patient care costs in a study are covered by the study sponsor, other funding sources, or qualify for reimbursement by third party payers.

Three Benefits of Conducting a FCA Early detection of items and services not covered by Medicare Develop a spreadsheet of all the patient care costs in the study. Determine if the trial qualifies for reimbursement under Medicare’s criteria. Identify costs not covered by insurance or the study sponsor. Development of a tool to ensure compliant claims processing Identify the claims to be split before billing. Identify the services that need research specific codes and/or modifiers. Identify the charges to be submitted to the study sponsor.

Three Benefits of Conducting a FCA, Cont’d Medicare’s expanded coverage of clinical trials means increased opportunities for reimbursement of the following: Services typically provided to patients with the disease under study (e.g. conventional care). Services provided to administer a drug, implant a medical device, or deliver a service. Clinically appropriate monitoring of the drug, medical device or service. Prevention, diagnosis, and/or treatment of complications.

Environment for Research Compliance Regulatory climate for clinical research billing compliance CMS created an integrated data repository for Medicare, Medicaid, and liability claims data to be used in identifying improper payments1. A standardized approach to billing for Medicare, Medicaid, and commercial payers is preferred Double-billing must be prevented Health care reform legislation requires the following: Commercial payers to cover routine care for some research2. Increased funding for Medicaid fraud and abuse control 1 CMS Integrated Data Repository (IDR) Overview, www.cms.gov/IDR/ . 2 Section 10103 of the Patient Protection and Affordable Care Act (PPACA).

Example FCA Grid – Outpatient Drug Study These will be billed to the third party payer. This will be billed to the research account and potentially the sponsor .

Example FCA Grid - Inpatient Device Study This will be billed to the third party payer. These costs will not be billed. These will be billed to the third party payer as a part of the DRG.

DRAFT - Confidential - Attorney Client Privileged - Attorney Work Product Completing the FCA Spectrum Health requires an FCA for all new studies with patient care costs (excluding chart reviews and retrospective studies). IRB approvals will be held until the Feasibility Review is completed. SC and PI Draft the FCA and Submit to Research Finance (RF) RF Reviews the FCA and Assesses the Budget Feasibility Approval is Needed Before IRB Approval Letters Can Be Released

Drafting the FCA Steps Study Coordinator (SC) documents the study identifying information SC drafts the Feasibility Grid using the protocol schedule of events SC consults the Principal Investigator to identify services that are solely for research purposes versus those that are for one of the following reasons: Medical Management of the patient Prevention, diagnosis, or treatment of complications Administration of an investigational item or service SC assigns a preliminary designation to each service using the options on the next page SC completes the Device or Drug/Procedure study tabs, as appropriate PI and SC submit the analysis to bethany.stanisiewski@spectrum- health.org and debra.vandyken@spectrum-health.org.

Potential Designations for the FCA Code Description Example SH Technical Fee provided at one of Spectrum Health Hospitals that is potentially billable. CBC SP Professional Fee provided by a Spectrum Health Physician that is potentially billable. Physical Exams AP Clinical service provided by an affiliate hospital or physician Any service S/D Professional or Technical Fee provided for research purposes only. This service will be paid by the study sponsor or clinical department. Biomarker analysis A Administrative costs that will not appear on a bill or generate a charge. Administering questionnaires Please note: There may be instances when using more than one code is appropriate. For example, with a CT scan, there is a professional and technical fee associated with it. So it would have at least two codes if the scan was completed at a Spectrum Hospital.

RA Office Review of the FCA Once the FCA is completed by the research team, the RA Office completes the following steps: Reviews the FCA for completeness and accuracy Validates qualifying status of the study Verifies CPT/HCPCS codes for items and services, where relevant Reviews Medicare guidance on reimbursement for routine items and services Drafts the budget Provides feedback to the research team Approves the FCA

Comprehension Question 1 Which statement is NOT a benefit of the FCA? Early detection of items and services not covered by Medicare. Development of a tool to ensure compliant claims processing. Identifying increased opportunities for reimbursement of complications related services. Identifying research participants.

Comprehension Question 2 Which statement is NOT true? Spectrum Health requires an FCA on all existing studies. Spectrum Health requires an FCA on all new studies. Feasibility approval is needed before the IRB Approval letter can be released. The Principal Investigator identifies the services that are solely for research purposes versus those that are for the medical management of the patient.

Medicare Guidance on Reimbursement of Routine Costs in Clinical Research

Coverage of Investigational Device Trials Spectrum submits documentation to Medicare’s designated contractor for approval to bill services “incident to” a device as required by local and national regulations. Devices that may be covered under Medicare include the following categories: Devices approved by the FDA through the Pre-Market Approval (PMA) process; Devices cleared by the FDA through the 510(k) process; FDA-approved IDE Category B devices; and Hospital Institutional Review Board (IRB) approved IDE devices Category A devices are not reimbursed by Medicare Source: Medicare Benefit Policy Manual Chapter 14 – Medical Devices

Coverage of Drug Trials Medicare implemented the Clinical Trial Policy (CTP) in 2000 to address coverage of the “routine costs” that were previously uncovered. ““. . . 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 all clinical trials. All other Medicare rules apply...”* The FCA helps to analyze a study using Medicare’s “qualifying” criteria described in the next slide. The FCA assists in identifying the “routine costs” described in the CTP. Source: CMS Clinical Trial Policy, updated 2007

CMS Clinical Trial Policy Qualifying Clinical Trials (QCT) Qualifying trials meet all four of Medicare’s criteria for reimbursement of routine care costs. 1. The investigational item or service is a member of a Medicare benefit category. 2. The trial must have therapeutic intent 3. The trial must enroll patients with diagnosed disease rather than healthy volunteers. 4. The trial must be “deemed” to meet CMS’ 7 desirable characteristics of a clinical trial. Source: Clinical Trial Policy

CMS Clinical Trial Policy “Deemed” Trial (continued) #1 #2 #3 #4 CMS Clinical Trial Policy “Deemed” Trial (continued) Trials that are automatically “deemed” to meet the seven desirable characteristics are A trial is considered deemed if 1 of the 4 criteria are met: Funded by NIH, CDC, AHRQ, HCFA (CMS), DOD, and VA; or Supported by centers or cooperative groups that are funded by the NIH, CDC, AHRQ, HCFA, DOD and VA; or Conducted under an investigational new drug application (IND) reviewed by the FDA; or Drug trials that are exempt from having an IND under 21 CFR 312.2(b)(1). Spectrum’s IND Exemption Policy: Industry-sponsored research will have a determination in advance of Spectrum feasibility review. Investigator-initiated research will get a determination from the IRB Source: Clinical Trial Policy

Trials that Do Not Qualify for Medicare Reimbursement of Routine Costs These studies are not feasible unless one of the following criteria are met: The study sponsor is covering all of the patient care costs (PCC) The PCCs are minimal An alternative source of funding is identified.

Routine Costs of Qualifying Clinical Trials CMS has defined ‘routine costs’ as the following: Costs INCLUDED Items and services otherwise generally available to Medicare beneficiaries (i.e., there exists a benefits category, it is not statutorily excluded, there is not a national non-coverage decision); Items and services that are typically provided outside of a clinical trial (e.g., conventional care); Items and services required solely for the provision of the investigational item or service (e.g., administration of a non-covered chemotherapeutic agent), the clinically appropriate monitoring of the effects of the item or service, or the prevention of complications; and Items and 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. Costs EXCLUDED The investigational items or services, itself; unless otherwise covered outside of the clinical trial; 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 Customarily provided by the research sponsors free of charge for any enrollee in the trial.

Medicare – General Exclusions from Coverage The following is a list of general exclusions from coverage as these items would not typically be covered outside of a clinical trial: Routine physical checkups Eyeglasses or contact lenses Eye examinations Hearing Aids Immunizations (some exceptions) Orthopedic Shoes Custodial Care Cosmetic Surgery Dental Services Any Services that are not Reasonable and Necessary Others Source: 42 CFR 411.15

Medicare Advantage Patients Medicare requires routine care for research related visits (except IDE cat A & B trials) to go through the traditional plans, not Medicare Advantage. Deductibles will be waived Fee-for-service Medicare contractors will make payment according to the traditional Medicare rules. Patients are responsible for co-payments under the traditional Medicare rules.

Glossary of Medicare Codes for Research Medicare’s Clinical Trial Policy and Investigational Medical Device Regulations require specific codes and modifiers be added to claims for processing and segregation of research charges. The following is a glossary of the current Medicare requirements: Current Research-Specific Codes Condition Code 30 – Qualifying clinical trial Diagnosis code V70.7 – Examination of participant in clinical trial Procedure Code Modifier Q0 – Investigational clinical service provided in a clinical research study that is in an approved clinical research study Procedure Code Modifier Q1 – Routine clinical service provided in a clinical research study that is in an approved clinical research study Revenue Code 0256 – Experimental drugs Revenue Code 0624 – FDA investigational devices

Medicare Claims Processing Requirements Medical Records must include: Trial name; Trial sponsor; and Sponsor-assigned protocol number. Claims for routine costs to the Part B Contractor must include: Q0/Q1 modifiers; ICD-9 diagnosis code V70.7 (as secondary diagnosis); Revenue Code 0256 – Experimental Drugs; and Revenue Code 0624 – FDA Investigational Devices. Claims for routine costs to the Part A Contractor must include: All the Part B contractor codes (modifiers are for outpatient claims only); and Condition Code 30.

Comprehension Question 3 Which type of device is NOT covered by Medicare? Devices approved by the FDA through the Pre-Market Approval (PMA) process; Devices cleared by the FDA through the 510(k) process; FDA-approved IDE Category A devices; FDA-approved IDE Category B devices; and Hospital Institutional Review Board (IRB) approved IDE devices

Comprehension Question 4 Qualifying Clinical Trials must meet which of the following criteria? The investigational item or service is a member of a Medicare benefit category. The trial has therapeutic intent. The trial enrolls patients with diagnosed disease. The trial is “deemed” to meet the 7 desirable characteristics. All of the above.

Comprehension Question 5 Trials that are automatically deemed to meet the 7 Desirable characteristics may include which of the following? Funded by NIH, CDC, AHRQ, HCFA (CMS), DOD, and VA Supported by centers or cooperative groups that are funded by the NIH, CDC, AHRQ, HCFA, DOD and VA Conducted under an investigational new drug application (IND) reviewed by the FDA Drug trials that are exempt from having an IND A, B, & C Only All of the above.

Comprehension Question 6 Medicare defines routine costs to exclude which of the following? Items and services required solely for the provision of the investigational item or service. Monitoring of the effects of the investigational item or service. Prevention, diagnosis, or treatment of complications. The investigational item or service, itself; unless otherwise covered outside of the clinical trial. All of the above.

Financial Feasibility Review Process Implementation of the Financial Feasibility Review Process

Roll-Out Schedule Completion of the FCA will be required for all new studies submitted on or after October 1, 2010. Billing Grids will be implemented as they are created for new studies. An announcement regarding implementation for existing studies will occur on or before January 1, 2011.