September 06, 2013

Complexity Creates Hazards in Clinical Trial Billing

On August 28, 2013, the U.S. Attorney for the Northern District of Georgia and the Georgia Attorney General announced that Emory University will pay $1.5 million to settle charges arising out of an action brought by a whistleblower (Emory's former clinical research finance manager) alleging that Emory's Winship Cancer Institute had illegally billed Medicare and Medicaid for clinical services that were, or should have been, paid for by the trial sponsor.

This is just the latest reminder of the complexity and hazards inherent in billing for care of patients enrolled in clinical trials. In its own statement, Emory correctly cited the "extremely complex" nature of billing for such patients. The complaint cites utilization of "dysfunctional, substandard clinical study accounting and control systems which defendants knew or were reckless in not knowing would result in submission of false claims."

The billing rules focus on the often blurry distinction between care relating to the trial and care that is appropriate but neither related to the trial nor covered by the sponsor contract. So complicated are the CMS rules that Emory announced its intention to establish an entirely new billing department dedicated solely to research-related care.

Adding to the complexity are the requirements for reporting payments for Medicare beneficiaries for injuries or complications arising out of clinical trials and new Affordable Care Act requirements for group health plans and health insurance issuers offering products (except grandfathered plans) to provide coverage of certain patient costs associated with clinical trials starting after 2013.

Academic medical centers and other institutions involved in clinical trial research should take care to (a) address this matter thoroughly in contracts with sponsors and (b) remain vigilant throughout the billing process. Likewise, companies sponsoring such trials should remain cognizant of these rules (a) in negotiating contracts and (b) in reviewing invoices from providers.

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