Coverage Analysis for Investigational Device Exemption (IDE) Studies

A Medicare coverage analysis (MCA) for clinical trials evaluates which tests, procedures, and interventions will be associated with a clinical trial. This analysis results in a budget and plan for invoicing third party payers and sponsors. Clinical trials for devices differ from interventional trials for drugs in a few key ways that can impact the process of conducting a coverage analysis.

While drug trials often involve a local review by the institution to document the qualification of a clinical trial, device trials with an FDA letter dated effective January 1, 2015, are reviewed at the national level by CMS. Prior to this change, devices with an FDA letter dated prior to January 1, 2015, sponsors and sites had to wait for IRB approvals and fully executed agreements in order to submit documents to the local Medicare contractor.

Medicare authorizes payment of the routine costs of care furnished to its beneficiaries in certain categories of Investigational Device Exemption (IDE) studies. However, there are a few items that Medicare excludes. These includes costs for items:

  • paid for by the sponsor
  • identified as free in the informed consent document
  • not ordinarily covered by Medicare
  • solely to determine trial eligibility or for data collection or analysis

The CMS approval process applies to category A and B trials. The category of the device, as assigned by the FDA, determines what is reimbursed by Medicare.

  • Category A devices are experimental or novel. Medicare will cover only the routine costs of care, but not the device itself.
  • Category B devices are non-experimental, or a similar device may already be in the marketplace. Medicare may cover the costs of care and the device.

To identify the “routine costs of care,” it is important to understand the protocol in detail. Devices may require surgical interventions that include a hospital stay, thus complicating the billing process. Analysts must review the ICD billing codes that may be referenced, including both hospital and professional fees.

To be considered for coverage, CMS requires documentation that covers similar issues as a drug intervention trial. CMS requires the submission packet to include:

  • Request letter that describes the scope and nature of the study
  • Complete FDA approval letter for your Category A or B IDE
  • IDE study protocol that includes descriptions CMS wants to see:
    • Method and timing of release of results on all prespecified outcomes, including release of negative outcomes and that the release should be hastened if the study is terminated early
    • How Medicare beneficiaries may be affected by the device under investigation
    • How study results are or are not expected to be generalizable to the Medicare beneficiary population
  • Institutional Review Board (IRB) approval letter
  • The National Clinical Trial (NCT) number
  • Any supporting materials

The sponsor may sometimes submit the packet to CMS for reimbursement. After that, the investigator or study site should be in contact with their Regional Medicare Administrator (MAC) to receive acknowledgement of receipt and receive further information on obtaining billing and coding information.

CMS does not provide detail about which clinical items are approved for reimbursement. Despite receiving CMS approval for an IDE study, sites are accountable for negotiating the contract with the sponsor and for billing appropriately. An accurate and detailed coverage analysis ensures correct billing and avoids costly financial errors. More importantly, it reduces the risk of non-compliant billing, which can have significant negative repercussions.  The analysis is an essential component of a study start-up process and conducting it in a timely way can avoid start-up delays.

Further resources

Medicare Coverage Related to Investigational Device Exemption (IDE) Studies (CMS)