NGHP User Guide Published without change to Clinical Trials Sponsors obligation to report.

Despite requests from pharmaceutical firms, the Centers for Medicare and Medicaid Services (CMS) published the latest version of their Mandatory Insurer Reporting User Guide version 3.2 dated 17 August 2011 without changes to the language or relief from the current reporting deadline of 1 January 2010.

After months of ongoing negotiations and meetings between two large pharmaceutical firms and CMS, brokered by Piatt Consulting, CMS has repeatedly put off changing their stance about the requirement to report injuries to Medicare beneficiaries arising out of clinical trials.  If CMS was going to deviate from the position it took last year that clinical trials constitute a liability plan that accepts liability for ongoing medical claims arising from a clinical trial, the new User Guide version would have been the vehicle of choice.  Change may yet come, but the odds are diminishing and clinical trial sponsors should weigh the risks of waiting too long to comply.

Consents that imply sponsor’s obligation to pay is secondary
Some clinical trial sponsor’s consent agreements (contracts) state the sponsor will pay for medical costs if another plan will not pay: implying they are secondary to any other plan.  Consent agreements that pay secondary when the claimant is a Medicare beneficiary do not conform to Federal statutes and may open the way for civil action by CMS for double damages. Sponsors should note that Medicare may not pay primary when payment can reasonably be expected to be made under a liability plan (see 42 U.S.C. § 1395y(b)(2)(A)(ii)) and includes a contract obligation as prima facie evidence of a reimbursement obligation under 42 C.F.R. § 411.22(b)(3).   Although the case involved a Group Health Plan, a recent Sixth Court of Appeals decision in Bio-Medical Applications v Central States  (09-6121/6169) rejected decisions of earlier courts that a plan’s obligation to pay has to be demonstrated by a civil suit before action for double damages can be tried.  It found that an existing contract for the insurer to pay [the provider] is sufficient.  Also of interest in this case was the Court’s decision that healthcare providers may sue a plan for double damages under the statute.  This decision, it seems, could be readily applied to the relationship between the clinical trial site (provider) and the clinical trial sponsor (plan).  Read our full analysis

Piatt Consulting has been actively working with two Pharma 15 companies to help them report claims for medical treatment made by Medicare beneficiaries enrolled in clinical trials under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA).  Clinical trials sponsors that do not report are subject to civil action by CMS for fines up to $1,000 per day per unreported beneficiary and may face double damages under Title 42 U.S.C. 1395y(b)(8) of the Medicare Secondary Payer (MSP) statute.