Routine Costs in Clinical Trials (310.1) (2022)


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Effective for items and services furnished on or after July 9, 2007, Medicare covers the routine costs of qualifying clinical trials, as such costs are defined below, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in all clinical trials. All other Medicare rules apply.

Routine costs of a clinical trial include all items and services that are otherwise generally available to Medicare beneficiaries (i.e., there exists a benefit category, it is not statutorily excluded, and there is not a national non-coverage decision) that are provided in either the experimental or the control arms of a clinical trial except:

  • The investigational item or service, itself unless otherwise covered outside of the clinical trial;
  • Items and services provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the patient (e.g., monthly CT scans for a condition usually requiring only a single scan); and
  • Items and services customarily provided by the research sponsors free-of-charge for any enrollee in the trial.

Routine costs in clinical trials include:

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  • Items or services that are typically provided absent a clinical trial (e.g., conventional care);
  • Items or services required solely for the provision of the investigational item or service (e.g., administration of a noncovered chemotherapeutic agent), the clinically appropriate monitoring of the effects of the item or service, or the prevention of complications; and
  • Items or services needed for reasonable and necessary care arising from the provision of an investigational item or service in particular, for the diagnosis or treatment of complications.

This policy does not withdraw Medicare coverage for items and services that may be covered according to Local Coverage Determinations(LCDs) or the regulations on categoryB investigational device exemptions found in 42 CFR 405.201-405.215, 411.15, and 411.406. For information about LMRPs, refer to www.lmrp.net, a searchable database of Medicare Administrative Contractor local policies.

For non-covered items and services, including items and services for which Medicare payment is statutorily prohibited, Medicare only covers the treatment of complications arising from the delivery of the non-covered item or service and unrelated reasonable and necessary care. However, if the item or service is not covered by virtue of a national non-coverage policy in Pub. 100-03, National Coverage Determination (NCD) Manual, and is the focus of a qualifying clinical trial, the routine costs of the clinical trial (as defined above) will be covered by Medicare but the noncovered item or service, itself, will not.

A. Requirements for Medicare Coverage of Routine Costs

Any clinical trial receiving Medicare coverage of routine costs must meet the following three requirements:

  • The subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category (e.g., physicians' service, durable medical equipment, diagnostic test) and is not statutorily excluded from coverage (e.g., cosmetic surgery, hearing aids).
  • The trial must not be designed exclusively to test toxicity or disease pathophysiology. It must have therapeutic intent.
  • Trials of therapeutic interventions must enroll patients with diagnosed disease rather than healthy volunteers. Trials of diagnostic interventions may enroll healthy patients in order to have a proper control group.

The three requirements above are insufficient by themselves to qualify a clinical trial for Medicare coverage of routine costs. Clinical trials also should have the following desirable characteristics; however, some trials, as described below, are presumed to meet these characteristics and are automatically qualified to receive Medicare coverage:

  1. The principal purpose of the trial is to test whether the intervention potentially improves the participants' health outcomes;
  2. The trial is well-supported by available scientific and medical information or it is intended to clarify or establish the health outcomes of interventions already in common clinical use;
  3. The trial does not unjustifiably duplicate existing studies;
  4. The trial design is appropriate to answer the research question being asked in the trial;
  5. The trial is sponsored by a credible organization or individual capable of executing the proposed trial successfully;
  6. The trial is in compliance with Federal regulations relating to the protection of human subjects; and
  7. All aspects of the trial are conducted according to the appropriate standards of scientific integrity.

B. Qualification Process for Clinical Trials

Using the authority found in §1142 of the Social Security Act (the Act) (cross-referenced in §1862(a)(1)(E) of the Act), the Agency for Healthcare Research and Quality (AHRQ) will convene a multi-agency Federal panel (the "panel") composed of representatives of the Department of Health and Human Services research agencies (National Institutes of Health (NIH), Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA), AHRQ, and the Office of Human Research Protection), and the research arms of the Department of Defense (DOD) and the Department of Veterans Affairs (VA) to develop qualifying criteria that will indicate a strong probability that a trial exhibits the desirable characteristics listed above. These criteria will be easily verifiable, and where possible, dichotomous. Trials that meet these qualifying criteria will receive Medicare coverage of their associated routine costs. This panel is not reviewing or approving individual trials. The multi-agency panel will meet periodically to review and evaluate the program and recommend any necessary refinements to the Centers for Medicare & Medicaid Services (CMS).

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Clinical trials that meet the qualifying criteria will receive Medicare coverage of routine costs after the trial's lead principal investigator certifies that the trial meets the criteria. This process will require the principal investigator to enroll the trial in a Medicare clinical trials registry, currently under development.

Some clinical trials are automatically qualified to receive Medicare coverage of their routine costs because they have been deemed by AHRQ, in consultation with the other agencies represented on the multi-agency panel to be highly likely to have the above-listed seven desirable characteristics of clinical trials. The principal investigators of these automatically qualified trials do not need to certify that the trials meet the qualifying criteria, but must enroll the trials in the Medicare clinical trials registry for administrative purposes, once the registry is established.

Effective September 19, 2000, clinical trials that are deemed to be automatically qualified are:

  1. Trials funded by NIH, CDC, AHRQ, CMS, DOD, and VA;
  2. Trials supported by centers or cooperative groups that are funded by the NIH, CDC, AHRQ, CMS, DOD, and VA;
  3. Trials conducted under an investigational new drug application (IND) reviewed by the FDA; and
  4. Drug trials that are exempt from having an IND under 21 CFR 312.2(b)(1) will be deemed automatically qualified until the qualifying criteria are developed and the certification process is in place. At that time the principal investigators of these trials must certify that the trials meet the qualifying criteria in order to maintain Medicare coverage of routine costs. This certification process will only affect the future status of the trial and will not be used to retroactively change the earlier deemed status.

The CMS, through the NCD process, through an individualized assessment of benefits, risks, and research potential, may determine that certain items and services for which there is some evidence of significant medical benefit, but for which there is insufficient evidence to support a “reasonable and necessary” determination, are only reasonable and necessary when provided in a clinical trial that meets the requirements defined in that NCD.

Medicare will cover the routine costs of qualifying trials that either have been deemed to be automatically qualified, have certified that they meet the qualifying criteria, or are required through the NCD process, unless CMS's Chief Clinical Officer subsequently finds that a clinical trial does not meet the qualifying criteria or jeopardizes the safety or welfare of Medicare beneficiaries.

Should CMS find that a trial's principal investigator misrepresented that the trial met the necessary qualifying criteria in order to gain Medicare coverage of routine costs, Medicare coverage of the routine costs would be denied under §1862(a)(1)(E) of the Act. In the case of such a denial, the Medicare beneficiaries enrolled in the trial would not be held liable (i.e., would be held harmless from collection) for the costs consistent with the provisions of §§1879, 1842(l), or 1834(j)(4) of the Act, as applicable. Where appropriate, the billing providers would be held liable for the costs and fraud investigations of the billing providers and the trial's principal investigator may be pursued.

Medicare regulations require Medicare+Choice (M+C) organizations to follow CMS NCDs. This NCD raises special issues that require some modification of most M+C organizations' rules governing provision of items and services in and out of network. The items and services covered under this NCD are inextricably linked to the clinical trials with which they are associated and cannot be covered outside of the context of those clinical trials. M+C organizations therefore must cover these services regardless of whether they are available through in-network providers. M+C organizations may have reporting requirements when enrollees participate in clinical trials, in order to track and coordinate their members' care, but cannot require prior authorization or approval.

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(This NCD last reviewed July 2007.)

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FAQs

What are the two types of costs for a clinical trial? ›

There are two types of costs in a clinical trial: patient care costs and research costs. Research costs are those related to taking part in the trial. Often these costs are not covered by health insurance, but they may be covered by the trial's sponsor.

How much does it cost to participate in a clinical trial? ›

The average cost of phase 1, 2, and 3 clinical trials across therapeutic areas is around $4, 13, and 20 million respectively. Pivotal (phase 3) studies for new drugs approved by the Food and Drug Administration (FDA) of the United States cost a median of $41,117 per patient.

What are the 4 types of clinical trials? ›

Types of clinical trials
  • Pilot studies and feasibility studies.
  • Prevention trials.
  • Screening trials.
  • Treatment trials.
  • Multi-arm multi-stage (MAMS) trials.
  • Cohort studies.
  • Case control studies.
  • Cross sectional studies.
1 Feb 2022

What is a Category B device? ›

Category B (Non-experimental/investigational) device refers to a device for which the incremental risk is the primary risk in question (that is, initial questions of safety and effectiveness of that device type have been resolved), or it is known that the device type can be safe and effective because, for example, ...

What are clinical costs? ›

Clinical Costs means the costs incurred by a Party or for its account, during the term and pursuant to this Agreement, in connection with clinical studies of a Product, whether alone or in combination with another product or agent, including the following: (a) the preparation for and conduct of clinical trials (except ...

What is a passthrough cost? ›

'Cost pass-through' describes what happens when a business changes the price of the products or services it sells following a change in the cost of producing them.

Why do clinical trials cost so much? ›

Factors that contribute the most to clinical costs across all trial phases include clinical procedure costs (15-22%), administrative staff costs (11-29%), site monitoring costs (9-14%), site retention costs (9-16%) and laboratory costs (4-12%).

How do you negotiate a clinical trial budget? ›

How to Negotiate a Clinical Trial Budget with a Sponsor
  1. Remember the sponsor's initial offer is calculated for the average study site - not all sites are created equal! ...
  2. Conduct a thorough analysis to determine if the funding is worth the cost to perform the study. ...
  3. Don't forget your major budget categories.

What is the average cost of a research study? ›

In general, you should plan to spend about $20,000 to $50,000 for a qualitative or quantitative custom market research project. For market research projects completed by a specialist firm within your industry niche, expect to lean into the higher end of that range.

What are the 5 stages of clinical trials? ›

Information For
  • Step 1: Discovery and Development.
  • Step 2: Preclinical Research.
  • Step 3: Clinical Research.
  • Step 4: FDA Drug Review.
  • Step 5: FDA Post-Market Drug Safety Monitoring.
4 Jan 2018

What is Phase 2a and 2b clinical trials? ›

Phase II studies are sometimes divided into Phase IIa and Phase IIb. Phase 2a is specifically designed to assess dosing requirements (how much drug should be given), whereas Phase IIb is specifically designed to study efficacy (how well the drug works at the prescribed dose(s)).

Who pays for clinical trials? ›

The sponsor of the study (such as the government, drug makers or technology companies) typically pays for all costs involved with a clinical research study. This includes supplying the new treatment, as well as any special testing, possible extra physician visits, and research costs involved in the clinical studies.

What does NCD 310.1 cover? ›

Under NCD 310.1, the Medicare program covers "routine costs of qualifying clinical trials … as well as reasonable and necessary times and services used to diagnose and treat complications arising from participation in all clinical trials." The term “routine costs” is a defined term under the Clinical Trial Policy.

What is IDE Category A? ›

decision making for coverage. As part of this agreement, FDA assigns a device with an FDA approved IDE to one of two categories: – Experimental/Investigational (Category A) – Non-experimental/Investigational (Category B) to include some investigational devices.

Do you need an IDE for a 510k? ›

Starting October 1, 2023, all 510(k) submissions, unless exempted*, must be submitted as electronic submissions using eSTAR. An investigational device exemption (IDE) allows the investigational device to be used in a clinical study in order to collect safety and effectiveness data.

What are patient care costs? ›

Research Patient Care Costs are the costs of routine and ancillary hospital services provided to individuals participating in research programs.

What are Phase 4 clinical trials? ›

Phase IV studies look at drugs that have already been approved by the FDA. The drugs are available for doctors to prescribe for patients, but phase IV studies might still be needed to answer important questions. These studies may involve thousands of people.

What is a Phase 1 clinical trial? ›

The main aim of phase 1 trials is to find out about doses and side effects. They need to do this first, before testing the potential new treatment to see if it works. Some people taking part may benefit from the new treatment, but many won't.

Are passthrough costs revenue? ›

Cash collect from pass-through expenses does not impact the revenue as we do not provide any service or add value to the customers.

What does direct cost include? ›

What are direct costs? Direct costs are expenses that a company can easily connect to a specific “cost object,” which may be a product, department or project. This category can include software, equipment and raw materials. It can also include labor, assuming the labor is specific to the product, department or project.

What are past expenses? ›

A past cost is money that has already been spent. These funds cannot be recovered, so the related cost is irrelevant for decision-making purposes. A past cost is also known as a sunk cost.

How Much Do clinical trial delays cost? ›

Failure to retain patients can cause costly delays. When a patient is lost from a clinical study, it means a great deal of wasted time and resources. Studies have shown that 80% of trials are delayed by at least a month, causing potential losses of approximately $600,000 (and potentially as high as $8 million) per day.

How much does an FDA approval cost? ›

FDA Costs and Consulting Service Fees. How Much Does a FDA 510k Approval Cost? The vast majority of our FDA 510K clients generally spend in the range of $20,000-$30,000 to have their product or device prepared and reviewed before the actual FDA 510k submission process.

How much is spent on clinical trials every year? ›

The 225 individual clinical trials had a median estimate of US$19 million (IQR US$12 million–US$33 million) per trial and US$41 413 (IQR, US$29 894–US$75 047) per patient.

Is negotiation necessary for budgeting? ›

Unlike top-down budgeting, negotiated budgeting increases the involvement of lower-level managers, which makes it easier to set realistic targets. Employees also demonstrate a more personal interest in the budget preparation, since they feel that their contribution is recognized by management.

What are examples of research costs? ›

Common Research Expenses
  • Policies Related to Purchasing Research Equipment.
  • Purchasing Computers, Software, Equipment; Hotel and Vehicle Rentals; Courier Rates.
  • University Purchasing-Related Contracts.
  • Ownership of Research Equipment.
  • Fixed Assets.
  • University Property Insurance.

What is the average cost of a Phase III clinical trial in the US? ›

Phase 3 clinical trials in the United States (many of them considered “pivotal”) range from US$11.5 million up to US$52.9 million [1].

How much is a research budget? ›

Multiple factors play into how much of a budget is allocated for research, making it tough to determine an exact percentage. Experts discussed percentages ranging from 1.5 to 15 percent, and these numbers may mean different things for different organizations and brands.

What are the 3 phases of FDA approval? ›

There are three primary phases of the approval process: pre-clinical trials, clinical trials, and new drug application review.

What is a Phase 3 study? ›

A study that tests the safety and how well a new treatment works compared with a standard treatment. For example, phase 3 clinical trials may compare which group of patients has better survival rates or fewer side effects.

What is a Phase 2 3 trial? ›

KLIH-nih-kul TRY-ul) A study that tests how well a new treatment works for a certain type of cancer or other disease and compares the new treatment with a standard treatment. Phase 2/phase 3 clinical trials may also provide more information about the safety and side effects of the new treatment.

What is Phase 1b 2a? ›

A Phase 1b/2a, Double-blind, Placebo-controlled, Dose-escalation Study to Evaluate the Safety, Pharmacokinetics, and Pharmacodynamics of Recombinant Human Plasma gelsolin (rhu-pGSN) Added to Standard of Care in Subjects Hospitalized for Acute Community-acquired Pneumonia (CAP) Condition or disease.

How do you qualify for Phase 2B? ›

Phase 2B. For a child: Whose parent has joined the primary school as a parent volunteer not later than 1 July of the year before P1 registration and has given at least 40 hours of voluntary service to the school by 30 June of the year of P1 registration.

What is a 3b trial? ›

Phase 3b Clinical Trial means a human clinical trial of a product that is initiated after the NDA is filed, but before such product obtains Regulatory Approval, the goal of which trial is to provide additional data for marketing support and the launch of such product in the Territory.

How are clinical trials funded? ›

Individuals or organizations can sponsor clinical studies

Government agencies, such as the National Institutes of Health (NIH), the Department of Defense (DOD), and the Department of Veteran's Affairs (VA) Private individuals, companies or organizations. Pharmaceutical, biotechnology and medical devices companies.

How do clinical trials get funded? ›

The funding for a clinical trial can come from different sources, including government agencies, institutions, or foundations. The National Institutes of Health is the primary source of government funding for trials. The government funding comes from taxes and is included in the Congressional budget.

Are clinical trials free to the patient? ›

Do I have to pay to be in a clinical trial? Patients generally do not have to pay extra out-of-pocket costs for treatments studied as part of a trial. Every trial is different, but the clinical trial's sponsor usually pays for all research-related costs and any special testing.

Which of the following does Medicare consider a routine cost Citi? ›

Which of the following does Medicare consider a routine cost? **Routine costs include items or services that are conventional care, items, or services required for the provision of the investigational item or service, and items or services needed for the diagnosis and treatment of complications.

What are NCD guidelines? ›

NCD s are developed by to describe the circumstances for Medicare coverage nationwide for a specific medical service procedure or device. s generally outline the conditions for which a service is considered to be covered (or not covered) and usually issued as a program instruction.

What does Q1 modifier mean? ›

Modifier Q1 is used for services defined as a routine clinical service provided in a clinical research study that is in an approved clinical research study. This modifier must be billed in conjunction with diagnosis code V70. 7 (examination of participant in clinical trial) or diagnosis code Z00.

What is the focus of 21 CFR 812? ›

The purpose of an IDE under 21 CFR Part 812 is to encourage the discovery and development of useful devices, with the proviso that “protection of the public health and safety” is preserved. FDA wants revolutionary new devices to be tested, as long as safety and ethics are kept a priority.

What is the IDE number? ›

In-State: (800) 884-6591. Out-of-State: (847) 991-9240.

What is 501k clearance? ›

Overview. Section 510(k) of the Food, Drug and Cosmetic Act requires device manufacturers who must register, to notify FDA of their intent to market a medical device at least 90 days in advance. This is known as Premarket Notification - also called PMN or 510(k).

What is the difference between PMA and 510 K? ›

510k vs PMA Applications: The Main Differences

510k submissions for Class II medical devices and PMA for Class III devices use different regulatory processes. In a nutshell, since Class III devices are crucial for patients' health and life, the FDA applies far stricter regulations to this type of medical device.

What does 510k exempt mean? ›

A device may be exempt from 510(k) requirements if the FDA determines that a 510(k) is not required to provide reasonable assurance of safety and effectiveness for the device (see sections 510(l) and 510(m) of the Federal Food, Drug, and Cosmetic (FD&C) Act).

What devices are exempt from IDE? ›

Under section §812.2(c) of the IDE regulations, studies exempt from the IDE regulations include diagnostic devices if the testing: is noninvasive; does not require an invasive sampling procedure that presents significant risk; does not by design or intention introduce energy into a subject; and.

Why do clinical trials cost so much? ›

Factors that contribute the most to clinical costs across all trial phases include clinical procedure costs (15-22%), administrative staff costs (11-29%), site monitoring costs (9-14%), site retention costs (9-16%) and laboratory costs (4-12%).

Who pays for clinical trials? ›

The sponsor of the study (such as the government, drug makers or technology companies) typically pays for all costs involved with a clinical research study. This includes supplying the new treatment, as well as any special testing, possible extra physician visits, and research costs involved in the clinical studies.

How much does a PK study cost? ›

– Protein binding studies. – Pharmacokinetic studies in three species. Total: $150,000 to $235,000 for each (PK, PD). Our experience: Only 7% of drug failures are due to PK problems, but these studies are very expensive.

How much do clinical trials cost UK? ›

Results. Median full economic cost of CTU activities was £769,637 (range: £661,112 to £1,383,323). Indirect costs varied considerably, accounting for between 15% and 59% (median 35%) of the full economic cost of the grant.

How do you negotiate a clinical trial budget? ›

How to Negotiate a Clinical Trial Budget with a Sponsor
  1. Remember the sponsor's initial offer is calculated for the average study site - not all sites are created equal! ...
  2. Conduct a thorough analysis to determine if the funding is worth the cost to perform the study. ...
  3. Don't forget your major budget categories.

How Much Do clinical trial delays cost? ›

Failure to retain patients can cause costly delays. When a patient is lost from a clinical study, it means a great deal of wasted time and resources. Studies have shown that 80% of trials are delayed by at least a month, causing potential losses of approximately $600,000 (and potentially as high as $8 million) per day.

How much does an FDA approval cost? ›

FDA Costs and Consulting Service Fees. How Much Does a FDA 510k Approval Cost? The vast majority of our FDA 510K clients generally spend in the range of $20,000-$30,000 to have their product or device prepared and reviewed before the actual FDA 510k submission process.

How are clinical trials funded? ›

Individuals or organizations can sponsor clinical studies

Government agencies, such as the National Institutes of Health (NIH), the Department of Defense (DOD), and the Department of Veteran's Affairs (VA) Private individuals, companies or organizations. Pharmaceutical, biotechnology and medical devices companies.

How do clinical trials get funded? ›

The funding for a clinical trial can come from different sources, including government agencies, institutions, or foundations. The National Institutes of Health is the primary source of government funding for trials. The government funding comes from taxes and is included in the Congressional budget.

Are clinical trials free to the patient? ›

Do I have to pay to be in a clinical trial? Patients generally do not have to pay extra out-of-pocket costs for treatments studied as part of a trial. Every trial is different, but the clinical trial's sponsor usually pays for all research-related costs and any special testing.

What is PK and PD in clinical trials? ›

The main difference between pharmacokinetics and pharmacodynamics is that pharmacokinetics (PK) is defined as the movement of drugs through the body, whereas pharmacodynamics (PD) is defined as the body's biological response to drugs.

How much do IND enabling studies cost? ›

Yes, You Need Collaborators! Being Patience and Persistent! The only problem: it will cost $2-3 millions for IND-enabling studies and another $5-10M for a phase I trial.

What is a PK assessment? ›

A PK test is a test of the content of pyruvate kinase within the blood. It's used as a diagnostic tool for certain medical conditions, including some types of anemia.

What are research costs? ›

Research Costs

These are the costs of the research itself. They include the costs of data collection and analysis and other activities that are undertaken specifically to answer the research questions.

Who pays for clinical trials in UK? ›

The money for tests and costs of hospital stays often comes from the government. The NHS covers the costs of trials that are part of the National Institute for Health Research Clinical Research Network's portfolio of clinical trials.

What are the 4 phases of clinical trials UK? ›

What is a clinical trial?
  • Phase I. Trials aim to test the safety of a new treatment. ...
  • Phase II. Trials test the new treatment. ...
  • Phase III. Trials involve larger numbers of patients. ...
  • Phase IV. Trials are done after a drug has been approved.
29 Nov 2018

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