On November 6, 2014, CMS announced changes to its Medicare Benefit Policy Manual and Medicare Claims Processing Manual related to coverage of items and services in Category A and B Investigational Device Exemption (IDE) studies. The changes to the manuals implement CMS’s regulatory modifications made in the CY 2015 Medicare Physician Fee Schedule (MPFS) rule, and are effective January 1, 2015.

In its update to the 2014 MPFS, CMS implemented major revisions to its regulations governing Medicare coverage of investigational devices and the routine items and services furnished to beneficiaries during the clinical studies or trials conducted under the FDA IDE regulations at 42 C.F.R. 405 Subpart B. For example, CMS set forth new standards for the costs of certain investigational devices, as well as the costs of routine items and services incurred by Medicare beneficiaries participating in FDA-approved IDE studies, to be eligible for Medicare coverage. CMS’s manual changes track the modified IDE regulations, which are intended to ensure that studies or trials of devices conform to appropriate scientific and ethical standards and include, among other things:

• A requirement that clinical trials or studies evaluating IDE devices meet a list of criteria in order for the costs of “routine care items and services” to be eligible for Medicare coverage, which criteria include, but are not limited to, the principle purpose of the study being required to be to evaluate whether the item or service can meaningfully improve health outcomes of patients who are represented by the Medicare-enrolled subjects; and
• Creation of a centralized review process to analyze and determine coverage of investigational devices, as well as routine items and services otherwise available to Medicare beneficiaries.

Effective for Category A and B IDE studies approved by the FDA on or after January 1, 2015, interested parties (i.e., study sponsors) that wish to seek Medicare coverage must submit a request for review and approval to CMS. For studies or trials approved by FDA after that date, claims for payment for investigational devices, as well as for the costs of routine items and services incurred by Medicare beneficiaries participating in FDA-approved IDE studies that are not covered without prior CMS approval and submission of such claims without approval could raise liability under the False Claims Act. CMS’s Medicare Learning Network article discussing the changes is available here and the change requests detailing the manual updates are available here and here.

Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.