Part D Drugs & Medicare Coverage Rules
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1 Part D Drugs & Medicare Coverage Rules Ryan Meade, JD Meade & Roach, LLP RMeade@MeadeRoach.com Kristin H. West, JD Assoc. V.P. & Director, Office of Research Compliance Emory University kwest02@emory.edu
2 Overview How are Part D Drugs Used During Research? What Part D Drugs are Covered During Research? How coverage works for Part A & Part B Rules related to Part D: None! Despite Lack of Coverage Rules, How Study Documents Can Impact Coverage of Part D Drugs Clinical Trial Agreement Research Informed Consent What s happening on the ground?
3 How are Part D Drugs Used During Research? 3 ways Part D drug could be used during research: 1. As the study drug given in office: If there is an industry sponsor, the drug will usually be provided free so that investigator can tightly control dispensing the oral medication at more frequent office visits than the time. 2. As the study drug prescribed during investigator-initiated study will not provide the drug free: Investigators may develop a study to research off-label use of prescription drug or observe a standard of care therapy. The patient would receive a prescription to be filled at retail pharmacy in normal way. 3. As supporting medication during study: Used to prevent or treat complications or prescribed as concommittant medication. The patient would receive a prescription to be filled at retail pharmacy in normal way.
4 Example of Part D drug used during research Tamoxifen FDA approved for treatment of breast cancer (all stages) Off-label acceptance for lung cancer Off-label acceptance for postmenopausal osteoporosis Used for 2-5 years for breast cancer Provided by prescription
5 Example of Part D drug used during research Tamoxifen studies: 173 tamoxifen studies registered at clinicaltrials.gov Some off-label studies: Fallopian tube cancer Hodgkin's disease Bipolar disorder Retroperitoneal fibrosis Liver cancer
6 Example of Part D drug used during research Questions to be asked of drug studies using Part D drugs: Is the study drug being provided free and dispensed from physician office? How long is the free supply?...the full 5 years or only 1 year and then patient must pay for next 4 years? Is the study drug provided by prescription and patient must pay? Is the study investigating a combination of the commercially approved drug and a non-fda approved drug? Is the drug supporting medication and not the focus of the study?
7 Medicare Coverage of Research Medicare Part A & Part B covers the routine costs of qualifying clinical trials under the Clinical Trial Policy (CTP) The CTP is set out at NCD Qualifying clinical trial for drug study Drugs trials funded by certain government agencies Drug trials with IND or IND exempt PLUS Studies designed with therapeutic intent Studies must enroll patients with diagnosed disease Routine costs Conventional Care Detection, prevention or treatment of complications Administration of study drug Investigational item if covered outside research study
8 Medicare Coverage of Research Does the CTP apply to covered Part D drugs? This policy is not applicable to and does not propose any changes to Medicare policies for coverage of prescription drugs under Medicare Part D. CMS April 10, st Reconsideration Memo This policy is not applicable to and does not propose any changes to Medicare policies for coverage of prescription drugs under Medicare Part D. CMS July 19, nd Reconsideration Memo Medicare is silent on Part D coverage during clinical research.
9 Medicare Coverage of Research Note, a qualifying clinical trial must meet the following standard: The subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category (e.g., physicians' service, durable medical equipment, diagnostic test) and is not statutorily excluded from coverage (e.g., cosmetic surgery, hearing aids). In both reconsiderations, CMS proposed to modify this standard as follows: The subject or purpose of the study must be the evaluation of an item or service that falls within a Medicare benefit category under Part A or Part B.
10 Open Questions on Part D Coverage During Research Does Part D cover a study if a Part D study drug is provided free in the investigator s office? Does Part D cover a study if a Part D study drug is provided by prescription? Does Part D cover the study drug if provided by prescription? Does Part D cover a supporting medication during a research study that is provided by prescription?
11 Study Document Effects Clinical Trial Agreement: Any item or service paid for by the sponsor cannot be billed to Medicare Research Informed Consent: Any item or service promised free in the research informed consent cannot be billed to Medicare
12 Clinical Trial Agreement Risks Organizational hurdle: Lack of understanding among investigators that the budget from a sponsor is one piece of a contract language of all parts of contract must be read as a whole Budget is often negotiated by different office than the main body of the contract Contract can be signed without budget attached or ever filed together Language in contract/budget can render items and services non-covered
13 A host of questions with no easy answers What obligation does the patient have to inform the pharmacy that the drug is being prescribed as part of a clinical trial? What obligation does the physician have to inform the pharmacy that he/she is prescribing a drug as part of a clinical trial? What obligation does the pharmacy have to inquire whether a drug is being prescribed as part of a clinical trial? What obligation does the Part D Plan have to develop audits and reviews for prescription drug use in clinical trials?
14 Clinical Trial Agreement Risks Language risks in contract/budget: Compensation in Exhibit A covers all costs associated with this research study. Compensation in attached budget pays for all items and services required by this research study. Institution and Investigator agree not to bill Medicare or any other third-party payor for costs of this research study. Payments at milestones cover costs for all medications provided during research study.
15 Clinical Trial Agreements for Trials Using FDA Approved Drugs Clinical Trial Agreement vs. MTA Approved drug may be obtained from sponsor and provided free to subjects per a CTA or MTA MTA used to provide drug when pharma company wants results from study but does not want to be the sponsor Investigator holds IND if it is an IND required trial (e.g., new use for approved drug)
16 Access to FDA Approved Study Drugs in Investigator Initiated Trials Investigator may not want a CTA or a MTA Trial does not require an IND Desire for more control over trial design Desire for more control over publication of results positive and negative Government-funded studies
17 Investigator Initiated Trials of Approved Drugs Potential Issues Study drugs not dispensed via investigational drug pharmacy script filled by retail pharmacy Medicare pays Should it?? July 9, 2007 CMS NCD Routine Costs of a Clinical Trial generally don t cover the investigational item or service, itself unless otherwise covered outside of the clinical trial. Applicable to Part D covered investigational items? Drug accountability issues? Are the retail pharmacists study personnel? Cost issues for subjects in studies in of drugs for which a generic or preferred brand is available?
18 Other Clinical Trial Agreement/Research Informed Consent Problem Areas: Subject Injury Language Common Rule Requirement: "For research involving more than minimal risk, an explanation as to whether any compensation and an explanation as to whether any medical treatments are available if injury occurs and, if so, what they consist of, or where further information may be obtained." 45 CFR (a)(6)
19 Policies on Sponsor Payment for Subject Injury More academic medical centers are adopting policies requiring Clinical Trial Sponsor to pay for subject injury arising from participation in the trial. Examples: Johns Hopkins Oregon Health Sciences University University of California Vanderbilt
20 Sample Subject Injury Policy Text -- OHSU OHSU policy requires that research subjects be provided any and all medical treatment reasonably necessary for any injury sustained as a direct result of research procedures. Sponsors of clinical research must reimburse OHSU for any losses sustained and costs incurred in providing research subjects with medical treatment reasonably necessary for any injury sustained as a direct result of research procedures performed in accordance with the protocol that would not be expected from the standard treatment using currently approved therapies. It is not acceptable for the sponsor to require billing of 3 rd party insurance companies or research subjects for treatment required for these injuries.
21 Tales from the Trenches: Implementing the Sponsor Pays Rule on the Ground Negotiating the Contract -- Sponsors never want to pay for anything that an insurer might pay for and will not readily agree to do so! We ve never had this issue come up at any of the other study sites?
22 Implementing the Sponsor Pays Rule on the Ground Medicare s Secondary Payer Rule: The negotiator s secret weapon?? Medicare views Sponsor as primary payer in subject injury context. April 13, 2004 Letter from CMS, Office of Financial Management
23 Implementing the Sponsor Pays Rule on the Ground [CMS] covers clinical complications due to research when the study meets all criteria of the Routine Costs in Clinical Trials National Coverage Decision (NCD). However, not all studies meet the CMS NCD criteria and in addition, OSHU has elected not to implement the provisions of the NCD due to administrative difficulties of implementation. Furthermore, CMS has determined that a clinical trial sponsor s agreement with trial participants that it will pay for medically necessary services related to injuries participants may receive as a result of participation in the trial constitutes a plan or policy of insurance under which payment can reasonably be expected to be made in the event such injury occurs.. Therefore, Medicare will not make payment. (OHSU, Why OHSU Does not Allow Billing of Research Related Injuries to Subjects or Their Third Party Payers, quoting CMS April 13, 2004 letter)
24 Implementing the Sponsor Pays Rule on the Ground More Questions Is it ever appropriate to bill a third party insurer first for these costs? Johns Hopkins Subject Injury Policy Text: Contracts for studies for which the commercial sponsor wrote the protocol and the commercial sponsor holds the IND or IDE must also agree to fund medical care costs for any study related injury. The Organization may execute contracts that exclude from such provision illnesses primarily due to a participant s underlying medical condition, or known risks of routine patient care portions of the protocol. Cost of medical care provided for study related injury shall be billed to a participant s insurance only in accord with the terms of the contract. (Emphasis added.)
25 Implementing the Sponsor Pays Rule on the Ground Logistics Subject gets treatment at a site other than study site. How is study site notified? How is determination made as to what is a study injury? How does sponsor pay bills? Direct pay to treatment site? Reimbursement to subject? To study site?
26 Implementing the Sponsor Pays Rule on the Ground Logistics Injuries vs. Complications Medicare states in NCD that it will pay for complications as a part of Routine Costs How do you distinguish an injury from a complication? Where does the subject get treatment? Study site: How is patient identified? How are bills to be paid by sponsor segregated? Auditing.
27 Implementing the Sponsor Pays Rule on the Ground Logistics A scenario: Patient suffers major injury as a result of study participation. CTA and informed consent states that sponsor will pay for subject injury. Patient seeks treatment, but not from site at which study took place. There are no contract or informed consent provisions that limit the site at which treatment may be maintained and payment mechanism is not spelled out. Treatment involves inpatient and outpatient care and Part D prescription drugs. Patient goes into collections at site that rendered treatment and contacts study site seeking assistance. This notification is the first that the PI hears about patient being injured.
28 Implementing the Sponsor Pays Rule on the Ground Logistics Bills had already gone through Medicare payment process at treatment site and pharmacy site and some were paid. Sponsor wanted to only reimburse for anything insurer had not already paid. Sponsor refused to pay subject or treatment site directly wanted study site to pay costs to treatment site and then reimburse study site. Sponsor wants study site to negotiate settlement as condition of payment, although it is not clear that all treatment has been finalized.
29 Solutions Contract documents are key Spell out sponsor for subject injury payment and logistics of how payment will be accomplished. Spell out subject responsibilities for how and where treatment must be obtained; notification to PI of possible injury; and documentation of any claims for expenses relating to treatment or prescription drugs obtained outside of site. Don t avoid problems just to get the deal done the worst may happen. Institutional and IRB policies play an important role in successful negotiations.
30 Questions?? Ryan Meade, JD Meade & Roach, LLP Kristin H. West, JD Assoc. V.P. & Director, Office of Research Compliance Emory University
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