Insights

The Basics of Coverage Analysis

Posted by PFS Clinical on Feb 23, 2017 8:57:18 AM
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Active accountant checking receipts in her office.jpegAs medicine continues to advance by the work of research institutions around the nation, the topic of billing compliance has become a highly prevalent matter in research administration. As such, institutions are looking for ways to ensure compliance, one of which is coverage analysis.

Coverage analysis is the process of reviewing a clinical trial protocol and determining which items and services can be billed to the study sponsor, and which can be billed to insurance. Though tedious, the process is crucial to the administrative wellbeing of a study, and can prevent costly errors that lead to billing non-compliance.

Medicare has strict rules that state a provider cannot receive payment from one party for a service and bill Medicare for that same service. Also known as “double billing,” this process is a severe form of Medicare fraud. However, by conducting a coverage analysis, you can avoid this mistake.

In addition to ensuring billing compliance, there are many additional benefits to performing a coverage analysis:
  • Increases revenue opportunities
  • Detects non-covered items/services early
  • Prevents double billing
  • Identifies potential coding issues
  • Ensures compliant claims processing
  • Identifies discrepancies between the ICF, budget and protocol
  • Helps determine study feasibility
  • Aids informing institutional clinical trial billing policies

Currently there are no regulations or mandates on when a coverage analysis is required. Accordingly, institutions can set their own policies based on risk tolerance. In general, most institutions should perform coverage analysis for any study in which items could potentially be billed to third party payers. For example, this includes (but is not limited to) oncology studies, cardiovascular studies, and neurosurgery studies.

The process of coverage analysis is largely guided by Medicare’s Clinical Trial Policy, also known as NCD 310.1. NCD 310.1 outlines the requirements of a qualifying clinical trial, as well as the services that Medicare will and will not cover within a trial. In general, Medicare will pay for “routine costs” of “qualifying clinical trials”. In order to qualify, the purpose of the trial must be one that is itemized in the Medicare Benefits Category List, have therapeutic intent, and include patients diagnosed with the disease under investigation. The trial must also be “deemed,” meaning it meets the seven desirable characteristics described by Medicare. These characteristics are automatically met if a trial is funded by the government or a co-op group, is conducted under an IND, or is IND-exempt. Once a trial is qualified, Medicare will only cover routine costs. These are items/services that would be provided outside of a clinical trial, items/services required solely for the provision of the investigational item, or reasonable and necessary care arising from the provision of the investigational item/service.

In terms of timing, there are two periods during which coverage analysis is performed on a trial. The first is part of the study start-up process, prior to the budget build. This is the ideal time to complete the coverage analysis. After the study opens, the coverage analysis can be used for ongoing use.

Above all, coverage analysis is an important part of clinical research administration. Conducting an analysis allows you to determine which items and services are billed to the study sponsor, and which are billed to insurance. While not all studies need an analysis, for those that do, performing a coverage analysis can save your institution time and money, as well as ensure billing compliance.

Access the On-Demand Webinar: Coverage Analysis 101

If you have questions about coverage analysis, check out the resources from PFS Clinical or feel free to contact questions@pfsclinical.com.

Authors: Katelyn Magney and Amanda Miller, PFS Clinical

Topics: Coverage Analysis