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Last Modified: 11/10/2017 Location: FL, PR, USVI Business: Part A, Part B

Devices and clinical trials

Medicare covers the use of devices that are "reasonable and necessary for the diagnosis and treatment of an injury or illness or to improve the functioning of a malformed body member”. Certain Health & Human Services (HHS) agencies have addressed agreements to facilitate the categorization and approval of devices for marketing related to safety issues under The Food and Drug Administration (FDA) jurisdiction and to facilitate consideration of Medicare coverage related to the reasonable and necessary threshold under the Centers for Medicare & Medicaid Services (CMS) jurisdiction. (See definitions at the end of this article.) The CMS delegates responsibilities to its Medicare administrative contractors (MACs) for Medicare claims administration that encompass proper billing and coding by the provider and coverage and payment by the contractor via its systems -- FISS (for Part A providers including hospitals) and MCS (Part B providers including physicians). For dates prior to January 1, 2015, Part A and B MAC administers pre-approval of clinical trials limited to certain DEVICE categories in clinical studies as outlined below. Claims for devices described by these categories cannot be considered for coverage until the pre-approval requirements are met and acknowledged in writing by the medical policy and procedures department at First Coast Service Options Inc.
Principle Investigators (PIs) and Medicare providers conducting research studies with traditional Medicare patients should be familiar with several regulations and guidance documents:
1. Medicare consideration of coverage of category B devices under the investigational device exemption (IDE) provision. external link.
There are devices which are refinements of existing technologies or replications of existing technologies made by other manufacturers. Many of these devices are under an FDA-approved IDE as a means of gathering the scientific information (via a clinical study) needed for FDA to establish the safety and effectiveness of that particular device, even though there is evidence that the device type can be safe and effective. On September 8, 1995, the FDA entered into an agreement with the administrator of the Medicare program, the Health Care Finance Administration (HCFA- now CMS), to provide information about devices under an IDE to aid in its reimbursement decisions. Under this agreement certain devices could be viewed as "reasonable and necessary" by Medicare and treatments could be covered if all other applicable Medicare coverage requirements are met. This was a compromise to address the coverage of devices given that Medicare does not usually cover investigational services/procedures.
Specifically, FDA will place all IDEs it approves in one of two categories:
Category A -- experimental (not covered by Medicare)
The IDE involves innovative devices in which "absolute risk" has not been established (i.e., initial questions of safety and effectiveness have not been resolved and thus FDA is unsure whether the device type can be safe and effective)
Category B -- investigational; non-experimental (can be covered by Medicare)
The clinical investigations involve device types believed to be in classes I or II or device types believed to be in class III where the incremental risk is the primary risk in question (i.e., underlying questions of safety and effectiveness of that device type have been resolved). This category includes device types that can be safe and effective because, for example, other manufacturers have obtained FDA approval for that device type. Non-significant risk studies may also be included in this category.
FDA provides the category determination on the IDE approval letter to the sponsor and also forwards this information to CMS. An approved IDE is identified by a six-digit IDE number preceded by a “G” (Gxxxxxx). Investigators/Providers must submit all the required information on the device and clinical study for contractor review and approval prior to submitting Medicare claims. The Part A and Part B MAC required IDE pre approval process is outlined on the website.
On June 7, 2000, the President of the United States issued an executive memorandum directing the Secretary of Health & Human Services to "explicitly authorize [Medicare] payment for routine patient care costs...and costs due to medical complications associated with participation in clinical trials." Medicare covers the routine costs of qualifying clinical trials, as such costs are defined in National Coverage Determination (NCD) 310.1 (routine cost in clinical trials, version 2 effective July 9, 2007), as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in all clinical trials. All other Medicare rules apply. The definition of a routine cost excludes the investigational item or service, itself, unless otherwise covered outside of the clinical trial. Though submitting a Medicare claim for routine cost in a qualifying clinical trial has specific billing requirements, Contractors do not pre review clinical trials except for certain device categories as noted in this article. Therefore, physicians and allied providers must be compliant with applicable billing, coding, and coverage requirements via the two claim systems (physician and facility claims) in regard to patients in clinical trials. Claims for traditional Medicare beneficiaries in clinical trials should meet the requirements of NCD 310.1 in that the services billed as routine cost must meet the definition of routine cost, and the clinical trial must be a qualifying trial.
Effective January 1, 2005 (Change Request [CR] 3548, Transmittal 131) Medicare covers the routine cost of clinical trials involving IDE category A devices (the device itself remains non covered) assuming all aspects of the contractor’s pre approval IDE process are met and only when the device is used in the trial for the diagnosis, monitoring, or treatment on an immediately life-threatening disease or condition (defined as “a stage of a disease in which there is a reasonable likelihood that death will occur within a matter of months or in which premature death is likely without early treatment”).
3. CMS has asked its contractors to assist in the administration of certain National Coverage Determinations (NCDs)
NCDs such as Percutaneous Transluminal Angioplasty (PTA) (20.7) located at the following website: external link (specific indication - Carotid Artery Stenting [CAS]) with pre-approval of certain IDE studies and certain post approval studies. Also, a CMS NCD can incorporate broader authority such as coverage with evidence development (CED) that may require the contractor to administer information such as approved facility, registry verification, or other data. Located at the following website:
external link Such requirements are published to the provider community.
Post-approval studies & post-approval extension studies related to CAS procedures
Effective October 12, 2004 (Change Request [CR] 3489, Transmittal 314), Medicare covers Percutaneous Transluminal Angioplasty (PTA) of the carotid artery concurrent with the placement of an FDA-approved carotid stent and an FDA-approved or cleared embolic protection device (effective December 9, 2009) for an FDA-approved indication when furnished in accordance with FDA-approved protocols governing post-approval studies. As the post-approval studies began to end, CMS extended coverage to post-approval extension studies that receive FDA review of each study protocol (effective February 28, 2006, CR 5088). The process for claims for post-approval studies and post-approval extension studies is similar to the Category B IDE pre approval process, except that under post-approval coverage, providers must use the Pre-Market Approval (PMA) number assigned to the stent system by the FDA given that the FDA cannot issue post marketing numbers. The FDA will issue a letter acknowledging a valid study, and CMS will issue a letter to the sponsor (and both letters should be submitted to the contractor along with the other materials). An approved PMA number is a six-digit number preceded by a “P” (Pxxxxxx).
510K Post-approval extension studies related to embolic protection devices during CAS procedures
Effective October 22, 2010 (CR 7249, Transmittal 2113), CMS has determined that all 510K post-approval extension studies must be reviewed by the FDA. The FDA will issue an acknowledgment letter stating that the extension study is scientifically valid and will generate clinically relevant post-market data. Upon receipt of this letter and review of the 510k post-approval extension study protocol, CMS will issue a letter to the study sponsor indicating that the study under review will be covered by Medicare. The process for claims for 510k post-approval studies is similar to the Category B IDE pre approval process except that the FDA evaluates these studies via the pre-IDE process and each 510k post-approval extension study is identified by a six-digit study identification number preceded by an “I” (Ixxxxxx).
In December 2013, CMS finalized changes to the IDE regulations (42 CFR 405 Subpart B), effective January 1, 2015. CMS added criteria for coverage of IDE studies and changed from local Medicare Administrative Contractor (MAC) review and approval of IDE studies to a centralized review and approval of IDE studies. An approval for a Category A (Experimental) IDE study will allow coverage of routine care items and services (NCD 310.1-Routine Costs in Clinical Trials) furnished in the study, but not of the Category A device, which is statutorily excluded from coverage. An approval for a Category B (Nonexperimental/investigational) IDE study will allow coverage of the Category B device and the routine care items and services in the trial.
Based on Change Request (CR) 8921, CMS announced changes effective on and after January 1, 2015, to Medicare coverage requirements and review procedures related to Category A and B IDE studies. Please refer to the following Medicare manuals:
“Medicare Benefit Policy Manual”, Chapter 14;
“Medicare Benefit Policy Manual”, Chapter 16, Section 10; and
“Medicare Claims Processing Manual,” Chapter 32, Section 68.
IDE studies approved by MACs prior to January 1, 2015 will continue to be administered by the MAC.  Study sponsors do not have to submit the protocol to CMS if the participating study investigator sites have already received approval from their MAC. Study sponsors should continue to follow the process established by the MAC for any site additions or protocol changes.
In summary, Medicare limits pre-approval of clinical trials to DEVICES, specifically to Category A and B IDEs and certain post approval studies related to CAS procedures. The Part A and the Part B MAC required IDE pre approval process outlined on the website includes the following topics:
Background on devices and clinical trials (this document)
IDE coverage background and approval requirements done prior to any claim submission (Also addresses related requirements for post approval studies. Link to clinical trials on the First Coast website Coding & Cost form & IDE extension request requirements: /Clinical_trials/138007.pdf pdf file.
IDE, post - approval, and 510 K billing guidelines (submission of claims post approval)
HUD background - see paragraph below. Clinical Trials are not reviewed.
Frequently asked questions on devices and clinical trials (available on the First Coast provider website: /Clinical_trials/195745.asp
Of note, a humanitarian use device (HUD), as defined by the Food and Drug Administration (FDA), is a device intended to benefit patients by treating or diagnosing a disease or condition that affects or is manifested in fewer than 4,000 individuals per year in the United States. Part A and Part B MAC does not review clinical trials for HDE (humanitarian device exemption) given trials are not a requirement of the FDA and Medicare coverage of such devices would be rare and very patient specific. Such devices may only be used in institutions where a local Institutional Review Board (IRB) has approved the use of the device to treat or diagnose the specific rare disease. Medicare Part A and Part B MAC administers claims under HDE on a case by case basis. See article on website for information that must be made available if practitioner and/or institutional records are requested (pre or post payment) related to claim submission. (As with any claim, payment of claim does not mean coverage hurdle met since not all claims are reviewed prepayment.)


Department of Health and Human Services -- refers to cabinet department of the United States government with the goal of protecting the health of all Americans and providing essential human services
Food and Drug Administration -- agency of HHS responsible for protecting and promoting public health through the regulation and supervision of medical device safety (as well as drugs and other products with medical applications).
Centers for Medicare & Medicaid Services (CMS) -- previously known as the Health Care Financing Administration (HCFA), agency of HHS that administers the Medicare program and works in partnership with state governments to administer Medicaid, the State Children's Health Insurance Program (SCHIP), and Health Insurance Portability and Accountability Act (HIPAA) standards.
Medicare Administrative Contractors -- entities contracted with CMS to administer various aspects of the Medicare program and specifically claims payment for medically reasonable and necessary services.
First Coast Service Options Inc. is the Medicare Part A and B MAC for (Florida, Puerto Rico, and the U.S. Virgin Islands).
Fiscal Intermediary Standard System -- used to process Medicare claims related to medical care provided by hospitals (Part A and certain Part B benefits) and by certain other providers that submit claims via the UB04 format.
Multi-Carrier System -- used to process Medicare claims related to non-hospital based physician care and to certain other Part B services that submit via the CMS-1500 format.
Medical devices -- classified into Class I, II, and III. Regulatory control increases from Class I to Class III. The device classification regulation defines the regulatory requirements for a general device type. Most Class I devices are exempt from Premarket Notification 510(k); most Class II devices require Premarket Notification 510(k); and most Class III devices require Premarket Approval. (Some Class III pre-amendment devices may require a Class III 510(k).) Class III devices are those that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury. Due to the level of risk associated with Class III devices, FDA has determined that general and special controls alone are insufficient to assure the safety and effectiveness of class III devices. Examples of Class I devices include examination gloves hand & held surgical instruments; Class II devices include powered wheelchairs & infusion pumps: and Class III devices include replacement heart valves (PMA needed) & implantable pacemaker pulse generator (PMA generally needed).
Premarket approval (PMA) -- 21 CFR (Code of Federal Regulations) Part 814 -- product requiring PMAs are Class III devices that are high risk devices that pose a significant risk of illness or injury, or devices found not substantially equivalent to Class I and II predicate through the 510(k) process. The PMA process is more involved and includes the submission of clinical data to support claims made for the device. A premarket approval means any premarket approval application for a Class III medical device, including all information submitted with or incorporated by reference therein.
Premarket notification (PMN or 510(k)) -- a 510(k) is a premarket submission made to FDA to demonstrate that the device to be marketed is at least as safe and effective, that is, substantially equivalent, to a legally marketed device (21 CFR 807.92(a)(3)) that is not subject to PMA. This type of submission is used for most Class II devices and some Class I devices (and some Class III devices). The majority of these submissions do not involve clinical data.
Investigational device exemption (IDE) -- allows the investigational device to be used in a clinical study in order to collect safety and effectiveness data required to support a premarket approval (PMA) application or a premarket notification [510(k)] submission to FDA. Clinical studies are most often conducted to support a PMA. Only a small percentage of 510(k)s require clinical data to support the application. Investigational use also includes clinical evaluation of certain modifications or new intended uses of legally marketed devices. All clinical evaluations of investigational devices, unless exempt, must have an approved IDE before the study is initiated. IDE refers to the regulations under 21 CFR 812. An approved IDE means that the IRB (and FDA for significant risk devices) has approved the sponsor’s study application and all the requirements under 21 CFR 812 are met.
Significant risk device (SR device) -- an investigational device that: (1) is intended as an implant and presents a potential for serious risk to the health, safety, or welfare of a subject; (2) is for use in supporting or sustaining human life and represents a potential for serious risk to the health, safety, or welfare of a subject; (3) is for a use of substantial importance in diagnosing, curing, mitigating, or treating disease or otherwise preventing impairment of human health and presents a potential for serious risk to the health, safety, or welfare of a subject; or (4) otherwise presents a potential for serious risk to a subject.
Investigator -- an individual who actually conducts a clinical investigation, i.e., under whose immediate direction the investigational device is administered, dispensed to, or used involving a subject. In the event of an investigation being conducted by a team of individuals, "investigator" refers to the responsible leader of that team.
Sponsor -- a person or other entity that initiates but does not actually conduct the investigation. An entity other than an individual (e.g., a corporation or an agency) which uses one or more of its own employees to conduct an investigation that it has initiated is considered to be a sponsor, not a sponsor-investigator, and the employees are considered to be investigators. The sponsor of an IDE must be located in the United States (see 21 CFR 812.18).
Sponsor-investigator -- an individual who both initiates and actually conducts, alone or with others, a clinical investigation, i.e., under whose immediate direction the investigational device is administered, dispensed, or used. The term does not, for example, include a corporation or agency. The obligations of a sponsor-investigator include those of an investigator and those of a sponsor.
First Coast Service Options (First Coast) strives to ensure that the information available on our provider website is accurate, detailed, and current. Therefore, this is a dynamic site and its content changes daily. It is best to access the site to ensure you have the most current information rather than printing articles or forms that may become obsolete without notice.