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)



When an Investigator is also a Sponsor

When investigators embark on designing, writing, and initiating the clinical trial, their responsibilities are just beginning. The FDA calls these investigators “sponsor-investigators (SIs)”. A sponsor-investigator is an individual who both initiates and conducts an investigation, and under whose immediate direction the investigational drug is administered or dispensed. In other words, in an investigator-initiated trial, the researcher is both the investigator and the sponsor, and therefore must handle the responsibilities for both roles.

The FDA provides guidance for individual investigators planning to conduct clinical investigations of FDA regulated drug(s) or device(s) for an indication that does not appear in the approved labeling for the product. Depending on the origin of the funding for the trial (e.g. federal funding) regulations by the U.S. Department of Health and Human Services Office for Human Research Protections (OHRP), 45 CFR 46 known as The Common Rule, may also be applicable.

In most cases, institutional policies and guidance fall into two major categories: protecting human subjects and ensuring the integrity of the data from clinical investigations. This is true for all research trials.

All investigators in interventional drug studies must complete and submit FDA Form 1572 (21 CFR 312.50), which specifically outlines certain responsibilities and obligations including agreeing to personally conduct and supervise the investigation.

Investigational New Drug (IND) or IDE Applications

Some protocols may require the investigator to submit an investigational new drug (IND) or an investigational device exemption application. However, a sponsor-investigator may not be required to submit an IND for a study of a lawfully marketed drug if the criteria outlined in the FDA regulations at 21 CFR 312.2(b) for an IND exemption are met. Investigators should confirm if the protocol is exempt from this requirement by reviewing the regulations. If sponsor-investigators are uncertain if the exemption criteria are met, they should seek advice from FDA.

For trials involving medical devices, the Investigational Device Exemptions (IDE) regulation (21 CFR 812) must be considered. Under this regulation medical devices are generally categorized as significant risk or nonsignificant risk devices. Significant risk devices studies must have an IDE application approved by FDA before any research may begin.

Conduct Good Clinical Practice (GCP)

GCP is an international ethical and scientific quality standard for clinical trials with a primary objective of protecting human rights. Compliance with this standard helps to provide assurance that the rights, safety, and well-being of trial subjects are protected. FDA has adopted GCP as guidance for carrying out clinical trials. FDA regulations relating to good clinical practice and clinical trials include:

Monitoring and Reporting

Good Clinical Practice (GCP) guidelines also describe the requirements for quality management in clinical trials to further ensure the protection of participants and the reliability of trial results. Investigator-sponsors have specific responsibilities for monitoring trials to confirm the trial is conducted and the data generated, recorded, and reported are in compliance with the protocol, GCP, and the applicable regulatory requirement(s).

The methods used to assure quality should be proportionate to the risks in the trial and the importance of the information collected. Methods for monitoring clinical trials range from on-site data verification to centralized data monitoring using statistical analytics to identify areas of risk.

Investigators who do not comply with these regulations and standard operating procedures run significant risk of liability and federal investigation. The FDA has outlined a specific process for investigating non-compliant investigators that includes disqualifying investigators from further research.

The regulatory landscape is constantly shifting and can pose some challenges, particularly for new investigators. Working closely with regulatory experts through the steps, as well as taking courses on GCP, can minimize the risks, protect patients, and ensure research integrity.

Further resources

FDA Guidance for Industry: Investigator Responsibilities

FDA Guidance for Sponsor-Investigators

ACRP Guide to FDA Form 1572

Be Prepared for an FDA Audit

An FDA audit or inspection can occur at any time, and sometimes with very little advance warning. The FDA conducts both announced and unannounced inspections of clinical investigator sites, typically under the following circumstances:

  • to verify the accuracy and reliability of data that has been submitted to the agency;
  • as a result of a complaint to the agency about the conduct of the study at a particular investigational site;
  • in response to sponsor concerns;
  • upon termination of the clinical research site;
  • during ongoing clinical trials to provide real-time assessment of the investigator’s conduct of the trial and protection of human subjects;
  • at the request of an FDA review division; and
  • related to certain classes of investigational products that FDA has identified as products of special interest in its current work plan (i.e., targeted inspections based on current public health concerns).

News headlines that attract the most attention tend to reflect serious allegations of fraud or negligence. The tendency may be to breathe a sigh of relief that such egregious offenses could “not happen here.” However, it’s the smaller, less obvious infraction that can slip through the cracks and cause serious headaches for investigators and their staffs. For example, if an inspector finds an issue with one clinical trial, the investigation may extend to your other trials.

FDA audits are usually just a routine procedure, but they can elevate the stress in a research office. Audits, whether in person or virtual, can last days, and questions are likely to come up.

As part of BRANY’s service to clients, a member from our quality team can work with research coordinators and investigators to organize documents for an efficient and orderly FDA review. There is much that the research site can do, however, to ease the process.

A review of research site audits we have conducted over the last several years highlights a few areas in which research staff can protect themselves before and during a trial.

Here are a few tips for being audit-ready at any moment.

Start with solid documentation. Starting on a strong foundation of detailed documentation will prepare your team for an inspection. Even if there are issues that come up during a trial, accurate and up to date documentation will outline how those issues occurred and were managed.

Organize each study topic. One of the most time-consuming efforts for research staff is organizing and properly labeling the materials. But this is an essential step in making information easily referenced and accessible.

We do not recommend relying on your electronic medical record to stand on its own. Because there are so many applications used by different institutions, regulators and auditors are not likely to want to navigate the software to find the information. The impetus is on the research office to extract and organize the information.

Refresh your memory. If the FDA does request an audit, take time review all the cases and review any issues that may have come up during the life of the trial. This will reduce your anxiety and risk of fumbling for answers should you be questioned.

Track any deviation from the protocol. Even if a sponsor approves a deviation from the study protocol, you are still required to log and report it to the IRB. Some changes can seem inconsequential. For example, a patient reschedules an appointment, so the follow-up occurs outside the defined timeframe. It must be documented and submitted. No deviation is too small for documentation and submission to the IRB. Remember to review monitoring reports for cited deviations and report to the IRB as required.

Additionally, it can also be beneficial to use a log to track concomitant medications, and adverse events.

Update credential and license information. For long-term studies, it’s important to review and update CVs and licenses in the regulatory binder. Review investigators’ medical licenses and update the documentation if they have expired.

Likewise, if your organization is using its own labs for processing specimens, it is important to update any CLIA or other certification documentation. Typically, lab certifications expire annually.

If you are packing and transporting any infectious agents, such as lab specimens, your personnel must receive training. The International Air Transport Association (IATA) has training for compliance in dangerous goods transportation. Anyone who collects, packs or ships these materials should be trained and certified; this must be documented in the regulatory binder.

Monitor your Delegation of Authority Log. If you add a new investigator to the trial, or hire a new research coordinator or study nurse, you must document the addition of any key personnel in your Delegation of Authority Log and have tasks appropriately delegated. This information must also be submitted to the IRB and confirm the key study personnel are IRB approved prior to performing key study procedures.

Conduct periodic internal reviews. With busy schedules, it can be tempting to wait for monitors to flag concerns. But it’s important to be proactive. Conducting a spot check every six months and a more detailed annual audit may protect you from panicked scrambling in the days before an announced FDA visit.

Being prepared for an audit does not mean hours of review. The secret of success is to keep regulatory binders up to date including sponsor correspondence, and IRB approval letters and correspondences, and to report changes and updates to the research to the IRB in a timely manner. If you doggedly track the seemingly small items throughout the course of a study, you will be in a good position to succeed in an FDA review.

Increasing Diversity in Clinical Trials

The FDA issued guidance in November aimed at enhancing diversity and encouraging inclusivity in medical research, specifically in the development of medical products. FDA Commissioner Stephan M. Hahn, M.D., wrote that “in order to promote public health, it is important that people who are in clinical trials represent the populations likely to use the potential medical product.”

Last week, the industry trade group PhRMA issued voluntary guidelines to members aimed at enhancing racial and ethnic diversity among clinical trial participants. Those guidelines go into effect in April 2021.

The FDA guidance discusses:

  1. broadening eligibility criteria and avoiding unnecessary exclusions for clinical trials;
  2. developing eligibility criteria and improving trial recruitment so that the participants enrolled in trials will better reflect the population most likely to use the drug, if the drug is approved, while maintaining safety and effectiveness standards; and
  3. applying the recommendations for broadening eligibility criteria to clinical trials of drugs intended to treat rare diseases or conditions.

The final FDA guidance addresses demographic diversity as well as non-demographic diversity, including people with co-morbidities, disabilities and wider weight ranges. Broadening inclusion eligibility for clinical trials impacts protocol design and methodological approaches.

The PhRMA guidelines specifically focus on outreach to communities of color to reduce health disparities. Activities include outreach and education, as well as the reduction of barriers to participation.

Exclusion and eligibility criteria necessarily balances risk of adverse events against the potential benefit of the research. Pregnant women, people with chronic or severe kidney disease, or complex medical conditions are often excluded from clinical trials due to risk. However, the FDA cautions against excluding certain populations out of habit or template, rather than based on strong clinical or scientific justification. Both sets of guidelines encourage broadening eligibility criteria to increase diversity when scientifically and clinically appropriate.

The FDA guidance addresses the logistics of participation and offers strategies for minimizing the burden on enrollees. For example, certain populations may find it difficult to visit research sites frequently. Researchers and sponsors are encouraged to consider alternative methods of engaging with participants, including phone or virtual visits, email, social media and digital devices.

Investigators and sponsors are encouraged to adopt enrollment and retention practices that enhance inclusiveness. Engaging patient advocacy groups in the design of protocols; increasing outreach and education through community organizations; expanding research sites to ethnic or underserved neighborhoods; hosting frequent recruitment events; and developing recruitment materials in multiple languages are just some of the suggestions.

While both the FDA and PhRMA address sponsored clinical trials, it can also influence investigator-initiated trials.

Broadening eligibility criteria and adopting more-inclusive enrollment practices should improve the quality of studies by ensuring that the study population is more representative of the population that will use the medical product if it is approved.

FDA Releases Draft Guidance for Medicare Coverage of Investigational Devices

The FDA recently released a draft guidance policy categorizing investigational device exemption (IDE) devices. The guidance was developed to assist the Centers for Medicare & Medicaid Services (CMS) in determining whether or not an IDE device should be covered (reimbursed) by CMS. The guidance has significant implications for research sites and investigators who are responsible for developing research budgets.

In 2013, CMS published a final rule that, among other things, categorized devices based on risk.

  • Category A devices are those “…for which ‘absolute risk’ of the device type has not been established (that is, initial questions of safety and effectiveness have not been resolved) and the FDA is unsure whether the device type can be safe and effective.”
  • Category B devices are those “…for which the incremental risk is the primary risk in question (that is, initial questions of safety and effectiveness of that device type have been resolved), or it is known that the device type can be safe and effective because, for example, other manufacturers have obtained FDA premarket approval or clearance for that device type.”

CMS uses FDA’s category definitions in evaluating whether or not an IDE device receives Medicare coverage. Medicare may cover an investigational device and routine care services provided in an FDA-approved Category B IDE study if CMS determines prior to the submission of the first related claim that the Medicare coverage IDE study criteria are met. Medicare may cover only routine care items and services furnished in an FDA-approved Category A IDE study, but not the device itself if CMS determines that Medicare coverage IDE study criteria are met. In other words, Medicare cannot cover device expenses for studies that FDA has categorized as Category A.

Since then, the FDA has received a number of IDEs which do not easily fit into the two main categories or any of the eight sub-categories. These often refer to early feasibility studies, or EFS, which evaluate early stage devices in a small population. These can be new devices or approved devices that have been modified for a new use and may pose significant risk.

Once the FDA determines that the sponsor has provided enough information justifying a clinical trial, it will use the suggested criteria to assign a device to a CMS Category A or B when the IDE is approved or approved with conditions.

Category A

FDA intends to consider a device to be in Category A if one or more of the following criteria are met, and if available data on the proposed device or its intended use do not resolve questions of safety and effectiveness.

  • No Premarket Approval (PMA), 510(k) clearance or de novo request has been granted for the proposed device.
  • The proposed device has different characteristics compared to a legally marketed device.
  • The proposed device is being studied for a new indication or new intended use

The FDA intends to consider a device Category B if one or more of the above criteria are met and additional non-clinical and/or clinical data on the proposed device resolve questions of safety and effectiveness.

FDA categorizes IDE devices based on whether available data demonstrate that initial questions of safety and effectiveness have been resolved. The guidance document describes the criteria that will be used to help determine the appropriate category for a device to be studied. It also describes when it is appropriate to change the device category from Category A to Category B.

It is important for research professionals to understand these categories in order to make the correct determination of whether or not to bill insurance for the device. Additionally, clinical trial coordinators need to be prepared to obtain CMS, or a local Medicare contractor, approval prior to enrolling patients or the institution risks not being reimbursed for the device or the services provided. This can have significant implications for clinical trial budgeting.

To read the full draft guidance, click here.