Coverage of Routine Clinical Trial Costs Under the Medicaid Program

Foley Hoag LLP - Medicaid and the Law
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Foley Hoag LLP - Medicaid and the Law

Right before the new year, we told you about some of the Medicaid-related provisions of the COVID relief package that was recently signed into law by President Trump.  One provision of that law that we thought merited a separate article was a new requirement that state Medicaid plans cover the routine patient costs of items and services furnished in connection with the participation by a Medicaid beneficiary in a routine clinical trial.  The provision will become effective in 2022, and is an important requirement designed to ensure that Medicaid enrollees are able to participate in clinical trials in the same manner that a Medicare enrollee or commercially insured patient is able to participate.

Specifically, under the new law, the routine patient costs for items and services furnished in connection with a qualifying clinical trial are treated as medical assistance under the Medicaid program and therefore are a Medicaid covered benefit.  And although some items of medical assistance are optional (for example, adult dental services are an optional Medicaid benefit), routine clinical trial costs will be a mandatory benefit.  Two definitions under the new law are relevant.

First, “routine patient costs” includes the coverage of any item or service provided during the clinical trial, including items or services designed to prevent, diagnose, monitor, or treat complications resulting from the participation in the trial to the extent those items or services would otherwise be covered under the state plan outside of a trial.  For example, let’s say that the clinical trial involved the IV administration of an unapproved drug under investigation for suppression of a viral pathogen.  The drug is expected to have an effect on the patient’s immune system, and the only way to measure its effect is through a blood test.  The new law ensures that the blood test will be covered.  Routine costs also include any item or service required solely for the provision of the investigational item or service – in our example, the IV administration of the drug.

Routine patient costs do not include the costs related to the provision of the investigational item or service (those costs would normally be borne by the sponsor of the trial).  In addition, costs related to data collection and analysis would not be a covered cost.

The law also defines “qualifying clinical trial” as a clinical trial “conducted in relation to the prevention, detection, or treatment of any serious or life-threatening disease or condition.”  In addition, the trial must be approved, conducted or supported through the National Institutes of Health, the Centers for Disease Control and Prevention, the Agency for Healthcare Research and Quality, CMS (or a collaboration of any of those agencies or the Departments of Defense or Veterans Affairs).  The trial could also be supported through a non-governmental research entity and could also be an FDA-approved investigational new drug exemption.

States must approve coverage of items or services in the clinical trial rapidly – within 72 hours.  Moreover, coverage is available without regard to the geographic location or network affiliation of the provider treating the individual Medicaid patient or the principal investigator of the clinical trial.  Attestation of the appropriateness of the clinical trial will be made pursuant to a streamlined, uniform form designed by CMS that is intended to ensure that coverage and approval is not burdensome.

About 20 years ago, CMS (which was then called the Health Care Financing Administration, or HCFA) approved a national coverage decision that provided a similar coverage policy for Medicare beneficiaries.  Adapting this policy to Medicaid was more difficult because Medicaid is, of course, a more state-driven system than Medicare.  With this change in the law, however, Congress has made an important step to ensure that Medicaid beneficiaries are well-represented in clinical trials.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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