Budgeting and Billing Compliance in Study Activation

As the clinical research industry continues to conduct more and more trials, sponsors and sites alike are faced with the task of expanding their budgets. They are faced with entertaining and requesting costs due to the growing need of bringing the posed drug or therapy through the phases and to market.

However, increased budgets leave room for increased billing compliance violations. In 2020 alone, $2.2 billion was recovered from the False Claims Act. How does this affect the study activation process? What are best practices to put in place to ensure proper billing compliance from the start? Perhaps the first steps are understanding why billing compliance issues occur, and where to start to mitigate risks.

Reasons for Billing Compliance Issues

Even with guidance and acts in place designed to prevent billing fraud, it still happens. The first case of billing fraud related to billing compliance happened in 2005, and we’re still seeing similar cases today. Some common reasons related to billing compliance issues includes:

• Double billing
• Inappropriately deeming clinical trials to be qualifying
• Inappropriately billing items/services as routine costs
• Falsely billing non-covered items/services as routine costs
• Falsely billing study team’s time/effort when a participant hasn’t been seen

It may be helpful for institutions to conduct a coverage analysis to help with billing compliance. Designed to break down all items and services required in a clinical trial, a coverage analysis shows what is covered and what is not covered by Medicare.

Where to Start with Billing Compliance

Now that we understand reasons for billing compliance errors, it’s important to know how to start to become more compliant. When starting, it’s helpful to ask the following:

• Are we compliant with billing practices?
• Are these costs enough?
• Are there any costs I’m missing?
• How fast do I need to move on this trial?

In order to effectively ask these questions, we must dig deeper and ask more questions to get to the root.

Does this Study Meet Medicare’s Requirements for “Extended Coverage”?

Extended coverage is defined as costs that wouldn’t normally be needed outside a particular study. In order to understand if something is considered “extended coverage”, NCD 310.1 is a guide outlining routine costs in clinical trials.

In NCD 310.1, there are two portions to address. The first portion addresses whether the investigational product (IP) or the study falls under a Medicare benefit category, if there’s therapeutic intent, and whether the patient has a diagnosed disease. The second portion to address is more invasive, but it’s important to provide clarity. Staff must indicate if the study is funded by a government-funded center or agency, if the Food and Drug Administration (FDA) reviewed a 6-digit investigational new drug (IND), or if it’s exempt from IND status altogether.

What are the Routine Costs in the Study?

How do we define what a routine cost is in a study? First, you must know if an item or service is covered by the sponsor or if it’s a standard of care (SOC). Defining those upfront will help you understand if it’s routine or not.

Additionally, knowing if NCD 310.1 offers extended coverage, if Medicare policies apply, or if there are any site-specific preferences can help determine if an item or service is considered routine. Another way to look at this question is asking if any Medicare statues affect coverage.

How do I Determine What is a Reasonable Cost for Items or Services?

Determining a reasonable cost for items or services is another way to confirm expenses are met. To understand what cost is referenced, current procedural terminology (CPT) codes are often utilized. This is referred to as “language” between sites and sponsors and is used to determine cost references. These extensive codes are noted on insurance claims, showing specific items or services performed. In addition, Medicare has provided public reimbursement rates for each of these CPT codes.

Staff will likely have to provide input for time and effort costs as well. In these cases, it’s helpful to rely on study staff experience, and use time estimates as well. For any other costs, communicating with departmental teams is an effective way to gain insight as to what estimates should look like.

What Administrative Fees Should I Include?

Lastly, you will need to address any additional fees that may apply to an administration. To understand what types of fees these may be, it’s helpful to identify if it’s only incurred as a result of trial participation, if it’s a “cost of doing business”, if the sponsor is likely to accept the request, or if it’s a reasonable ask. An example of this are costs a hospital incurs to keep staff employed.

Knowing and understanding how to properly route costs and fees in a study will greatly benefit your study team when it comes to staying compliant and avoiding issues such as double billing. This will simultaneously keep your organization’s reputation intact, setting you up for future success.

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