Coverage Analysis: Standard of Care vs. What Medicare Covers

In a perfect world, all items or services performed as part of a patient’s standard of care (SOC) would be covered by Medicare, but that’s not always the case. Time and time again, we encounter labs, procedures, scans, and anything in between that Medicare or private insurance will not reimburse. This is especially critical within the scope of a clinical trial, where additional assessments outside the participant’s SOC is required. To address this concern, perform a coverage analysis, outlining what is and is not billable to Medicare.

A patient’s SOC refers to an item or service done as part of their routine care. For example, if someone is suspected to have a type of cancer, a physical exam would most likely be warranted as part of their SOC.

The primary purpose of Medicare is to provide basic health insurance. Many interpret this to mean all items or services done as part of the patient’s SOC are therefore covered by Medicare when performed. While this often true, there are frequent exceptions. Medicare has issued numerous documentations outlining these determinations, defining what Medicare intends to cover:

• National Coverage Determinations (NCDs),
• Local Coverage Determinations (LCDs),
• Medicare Benefit Policy Manuals,
• Appropriate Use Criteria Programs, and
• Coverage with Evidence Development.

This process is long and complicated, usually involving a coverage analysis. Coverage analysis is a review to determine if a research study is eligible to receive Medicare coverage and outlines what items and services performed as part of the research study should be billed to Medicare. A proper coverage analysis outlines any applicable Medicare policy, while also addressing the potential costs which will not be reimbursable by Medicare or private insurance. This may include costs the sponsor intends to cover, services bundled into the costs of other services, items provided free of charge without any monetary exchange, etc.

When coverage analysis is overlooked, hospitals and research sites are subject to audits and lawsuits. In 2019 alone, the Department of Justice recovered over $3 billion in settlements and judgments under the False Claims Act. Individual sites commonly face multimillion-dollar settlements and are at risk of losing federal funding as a result.

Advarra conducts coverage analyses tailored specifically to your institution’s guidelines. Learn more about how to streamline the coverage analysis process through Advarra’s Coverage Analysis Service.

Research institutions performing clinical trials are often at an increased risk. Extended coverage is obtainable for clinical trials qualifying under Medicare’s National Coverage Determination for Routine Costs in Clinical Trials (310.1). This, however, does not overrule other forms of guidance issued by Medicare. In these cases, a coverage analysis is needed. A coverage analysis should not only document medical necessity, but also reference applicable guidance issued by Medicare.

Clinical staff provide excellent insights as to what is considered SOC. Nevertheless, without the proper training and experience in Medicare rules and regulations, organizations should not rely on clinical staff to perform a coverage analysis. This task should fall to specialized individuals who understand Medicare guidance, can interpret indications and limitations appropriately, and put the institution’s priorities first.

A specific example of coverage analysis is viral serology screening in the oncology setting. Hepatitis B virus (HBV), hepatitis C virus (HCV), and human immunodeficiency virus (HIV) serve a great purpose in determining whether a participant can safety receive chemotherapy treatment. Peer-reviewed and medically accepted treatment guidelines often recommend HBV, HCV, and HIV testing prior to chemotherapy. Some forms of chemotherapy even include a “black box warning”, FDA’s most stringent warning to call attention to serious side effects, outlining the need to perform these types of tests. However, Medicare released NCDs for each of these tests performed as part of a screening assessment. A proper coverage analysis calls attention to these applicable NCDs, clearly outlining why Medicare coverage is either indicated or limited.

Medicare may not always cover SOC items or services. Although, consider if Medicare indicates coverage of an item or service your institution does not view as SOC: is this item or service billable to Medicare?

The simple answer is no. Just because something can be billed to Medicare does not mean it should be billed to Medicare. If your research institution views an assessment as “non-covered” outside of the scope of a clinical trial, this practice should not change within a clinical trial. Billing practices should stay consistent and align not only with your institution’s priorities, but also the participant’s SOC.

A coverage analysis performed by specialized personnel should outline the topics listed above when applicable. At Advarra, our coverage analysis team emphasizes the need to document both medical necessity and Medicare guidance. This is done in a clear, logical manner that enables anyone from your institution to understand the billing determinations made. While it is important to note when items and services are performed as part of a participant’s standard of care, it is crucial to then confirm whether this is also covered by Medicare.

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