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November 16, 2015 Readers Write No Comments

The Complexity of Maintaining Compliance
By Megan Tenboer

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Clinical research presents a unique challenge when it comes to billing compliance. Often it’s left to clinical staff to understand Medicare and third-party guidelines, Clinical Trial Policies and other internal and external regulations, and to stay current in a fluid regulatory environment. Non-compliance puts the institution’s financial and ethical well-being at risk.

Two timely illustrations of just how complex compliance can be for research institutions came into play earlier this year. One revises the submission process for investigational device exemption (IDE). The other is the introduction of Condition Code 53 (CC-53).

Not satisfied with simply expanding criteria for coverage of IDE studies, the Centers for Medicare and Medicaid Services (CMS) also decided to centralize the review and approval process.

Previously, research institutions were responsible for submitting the require documents to their respective Medicare Administrative Contractor (MAC)[i] for device trials. Now CMS requires the sponsoring organization to secure approval of coverage for IDE device trials that obtained an FDA approval letter dated January 1, 2015 or later.

If this change is overlooked, it could have a devastating financial impact on the study and could delay treatment for patients in critical need. Failure to seek coverage approval through appropriate channels will delay or negate reimbursement for expenses related to the use of an FDA-approved device—even the device itself depending upon whether it is a Category A (Experimental) or Category B (Non-experimental) IDE study (Category A devices are statutorily excluded from coverage[ii]).

Another layer of complexity hit research institutions on July 6, 2015. An updated code details the process/requirements when generating a claim to local MACs, titled, Condition Code 53 (CC-53). This code is designed to identify and track medical devices that are provided to a hospital by the manufacturer at no cost or with full credit due for a clinical trial or a free sample.[iii]

Previously, hospitals used either CC-49 (Product Replacement within Product Lifecycle) or CC-50 (Product Replacement for Known Recall of a Product) along with value code “FD” (Credit Received from the Manufacturer for a Replaced Medical Device). However, these codes described only procedures surrounding replacement devices and not a reduced cost for non-replacement devices. The latter may be provided to Medicare beneficiaries as part of medical device trials.

It seems straightforward, and its intent was to fill the void by describing initially implanted medical devices that are not replacements. However, critics have been vocal about the lack of clarity about the new code. This new code adds to an already overflowing cache of device-related services that must be reported.

These two mandates may appear to be obscure regulations that impact only a small fraction of the overall healthcare market, but that’s not the case. According to business intelligence provider Visiongain, the worldwide market for clinical trials over the next five years will experience a cumulative growth of more than 50 percent.

Further, clinical research organization global revenues are expected to reach $32.73 billion in 2015 and to exceed $65 billion in 2021. Add the growing number of strategic alliances between full-service clinical research organizations and big pharma organizations that have outsourced drug development and the impact of errors skyrockets.

The best defense is to assign one individual to become the “regulatory mandate” expert tasked with staying up-to-date on proposed and finalized changes to ensure timely compliance.

Megan Tenboer is director of strategic site operations at PFS Clinical of Middleton, WI.


[i] Centers for Medicare and Medicaid Services: Medicare Coverage Related to Investigational Device Exemption (IDE) Studies. Available at: http://www.cms.gov/Medicare/Coverage/IDE/

[ii] Department of Health and Human Services Health Care Financing Administration: Medicare Carriers Manual Part 3 – Claims Process. Transmittal 1701. May 25, 2001. Available at: https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R1704B3.pdf

[iii] Centers for Medicare and Medicaid Services. “Implementation of New National Uniform Billing Committee (NUBC) Condition Code “53” – “Initial placement of a medical device provided as part of a clinical trial or a free sample.” MLM Matters. Medicare Learning Network. Available at: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8961.pdf

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