In the face of both substantive and procedural concerns, the Centers for Medicare & Medicaid Services (“CMS”) has decided not to adopt significant changes to the Medicare clinical trial national coverage policy that it had proposed on July 19, 2007. Instead, CMS’s July 9, 2007 final clinical trial coverage policy stands.

As a result of CMS’s decision, clinical trial sponsors will not be required to meet the more detailed scientific and technical standards CMS was considering imposing as a condition of Medicare coverage for certain items or services that are furnished as part of clinical research studies. On the other hand, there remains no mechanism for a sponsor to “self-certify” that a clinical trial meets CMS standards.

CMS suggests that it will be reassessing its policy options, particularly in light of the recent enactment of the Food and Drug Administration Amendments Act of 2007, which includes new requirements for clinical trials. Further refinements in the Medicare clinical trial policy, including potential regulatory changes, could be forthcoming.


On September 19, 2000, in response to a June 7, 2000 Clinton Administration Executive Memorandum encouraging Medicare beneficiary participation in clinical trials, the Health Care Financing Administration (now CMS) implemented a Clinical Trial Policy national coverage determination (“NCD”).1 The 2000 NCD provides reimbursement for routine patient care costs for Medicare beneficiaries in qualified trials, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in all clinical trials, when certain conditions are met. The policy does not provide coverage for the investigational item or service itself,2 items and services provided solely to satisfy trial data collection and analysis needs, or items and services customarily provided by the research sponsors free of charge for any enrollee in the trial. The 2000 policy sets forth three requirements and seven “highly desirable characteristics” of a qualified trial.3 CMS provides two options for determining that trials meet these standards: a self-certification process, which has not yet been, and may not be, implemented, and a “deeming” process for trials funded by certain federal agencies, trials conducted under an investigational new drug (“IND”) application reviewed by the FDA, and certain drug trials that are exempt from having an IND. Note that the policy did not withdraw coverage for items and services that are approved under local contractor coverage policies.

CMS began a reconsideration of the 2000 NCD last year, and the agency issued a proposed decision memorandum on April 10, 2007.4 Among many other things, CMS proposed setting forth detailed Medicare-specific standards for qualified clinical studies (including registration on ClinicalTrials.gov, study protocols addressing applicability to the Medicare population, and a requirement to release study results); disallowing payment of administrative costs associated with a clinical trial; deleting the self-certification option; and removing the deemed status of IND-exempt studies. The draft policy, and subsequent CMS discussions of the draft, raised a controversial interpretation that coverage under the NCD was essentially the only route to Medicare coverage in clinical trials, rather than, as others believed, an alternative path to Medicare coverage within federally-funded trials but not a restriction on Medicare coverage under privatelyfunded trials.

CMS issued a final NCD on July 9, 2007.5 At the time, CMS acknowledged concerns that were raised during the reconsideration process about the extent to which the Medicare policy applied to privatelysponsored clinical research conducted outside the terms of the clinical trials policy, and potentially inconsistent application of this policy in the past by Medicare contractors. While CMS expressed its intention to amend its policies to provide clear and consistent standards, it acknowledged that the public had not had an adequate opportunity to comment on those changes. Given the confusion surrounding the 2000 policy and some contractors’ practice of paying certain claims that did not meet the 2000 standards, CMS’s July 9, 2007 policy was designed to “preserve the status quo,” with the following two exceptions:

(1) CMS modified the language in the 2000 policy to clarify that the item or service under investigation can be covered if it would be covered outside of the clinical research trial; and

(2) CMS added a reference to CMS’s “coverage with evidence development” (“CED”) policy, under which Medicare may require as a condition of coverage the collection of additional patient clinical data.

On July 17, 2007, CMS released yet another proposed Clinical Research Policy NCD.6 CMS stated that it wished to ensure that coverage for Medicare beneficiaries participating in research studies was consistent across all types of studies, including both federally-funded research and privately-funded trials. The policy again proposed more detailed coverage criteria for Medicare-covered clinical trials and would have disallowed payment for administrative costs associated with trials, but this version would have provided a mechanism for trial sponsors to self-certify that their trials met CMS criteria. However, as discussed below, CMS ultimately decided not to adopt these changes.


Most recently, on October 17, 2007, CMS issued its final NCD.7 CMS announced that the agency is making no changes at this time to the existing July 9, 2007 NCD policy (which, as noted above, continued the 2000 NCD except for permitting coverage of the investigational item if otherwise payable outside of the clinical trial and referencing the availability of coverage through a CED policy). Importantly for ongoing clinical trials, CMS states that it “will continue to cover items and services in some trials that did not meet the standards of the 2000 policy but have been paid by some contractors.”

CMS decided not to adopt changes in its policy after determining that there were questions regarding CMS’s authority to limit coverage within research studies, continuing confusion regarding the proposal, and requests for the use of a formal rulemaking process to institute any potential coverage restrictions. Moreover, after the comment period on the proposed NCD closed, Congress passed the Food and Drug Administration Amendments Act of 2007, which expands the Federal Food, Drug, and Cosmetic Act to require the registration of almost all clinical trials involving drugs, biologics, and devices, and which requires publication of clinical trial results for FDA-approved products.8 CMS notes that it “is continuing to review this new legislation and will work with other HHS components in order to avoid imposing duplicative or inconsistent obligations.”


This development generally preserves greater flexibility in Medicare coverage for clinical trials and research than had been proposed earlier this year. It appears that routine costs in post-approval, on-label comparative trials will continue to be covered by Medicare either by local contractors or national decisions, although there still are concerns that the lack of a self-certification process is a barrier to wider Medicare coverage of privately-funded clinical trials.

Even so, recent CMS denials or restrictions on Medicare coverage for specific products and CMS denial of new technology DRG add-on payment and product code applications because of insufficient clinical evidence underscore the growing demands at CMS for clinical outcomes data that is different than FDA approval data. Increasingly, CMS is demanding evidence of effectiveness in the Medicare population, rather than in the general population, suggesting that clinical trials include patients who are 65 years of age or older, if Medicare coverage would be important. Moreover, the Agency for Healthcare Research and Quality (“AHRQ”) is gathering responses to a draft guide on comparative effectiveness analysis which could further raise the standards for coverage. These developments underscore the growing importance for clinical trials to go beyond conventional analyses of safety and effectiveness to document improved outcomes compared to alternatives, with a particular emphasis on the Medicare population, if the trial data is intended to support coverage, coding, and payment in the Medicare context.