What triggers a clinical trials report?

 

There has been some confusion and debate about what is to be reported and CMS did themselves no favors with their brief summary.  According to CMS’s NGHP User Guide, Clinical Trial Sponsors are to report:  “When payments are made by sponsors of clinical trials for complications or injuries arising out of the trials, such payments are considered to be payments by liability insurance (including self-insurance) and must be reported. The appropriate Responsible Reporting Entity (RRE) should report the date that the injury/complication first arose as the Date of Incident (DOI). The situation should also be reported as one involving Ongoing Responsibility for Medicals (ORM)”

 

Tort or Contract?

 

Contract.  The legal basis for enforcing Medicare Secondary Payer statutes arising from clinical trials is one of contract, not tort.  It is their consent form in which they agree to pay for any injuries arising out the trial that forms the legal basis for a civil action.  Whether or not the beneficiary is taking a placebo is not germane to the fact there is a contract to treat a beneficiary.

 

To further illustrate the point that it is a matter of contract, consider the following argument.

 

In 42 U.S.C. 1395y(b)(2)(A) “An entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance, or otherwise) in whole or in part...”

 

In 42 C.F.R § 411.21  “Plan means any arrangement, oral or written, by one or more entities, to provide health benefits or medical care or assume legal liability for injury or illness,” clearly encompasses the written consent form as an assumption of legal liability.

 

In 42 C.F.R  § 411.50   General provisions. “Liability insurance means insurance (including a self-insured plan) that provides payment based on legal liability for injury or illness or damage to property,” this regulation provides CMS the opportunity to use payment as prima facie evidence of an insurance plan regardless whether or not a written agreement is in place.

 

Payment or Adverse Event?

 

Payment is often misconstrued as the criteria and trigger for reporting claim under MMSEA.  The statutory language actually says, “... if payment has been made, or can reasonably be expected to be made, with respect to the item or service...”  then Medicare is prohibited from making a payment (Medicare is secondary).  Medicare uses the existence of a payment made or a contractual obligation to pay (e.g., Group Health Plan) by a business entity as prima facie evidence of a primary plan.

 

In addition to the reference to a payment made by Medicare in establishing the existence of the sponsor’s plan; Medicare’s definition that a clinical trial sponsor’s commitment to cover the costs of injuries arising out of the trial is “liability” insurance, muddied the waters.  Many attorneys have dealt with Medicare in tort cases involving a Medicare beneficiaries.  In tort cases, Medicare makes conditional payments and expects reimbursement for those payments when the case is settled.  Nothing is reported to Medicare until payment is made to the beneficiary.  Medicare’s direction that sponsor’s report ORM rather than a Total Payment Obligation to Claimant TPOC) would have been clearer if Medicare could have labeled the sponsor’s plan as a workers’ compensation plan instead of a contractual liability for treatment.   Much like a sponsor’s commitment to pay for injuries related to their trial, a workers’ compensation plan is contractually obligation to pay for injuries arising from their work.

 

Sponsors are required to report the establishment of their ongoing contractual obligation to pay for medical claims arising out of the clinical trails.  In practice, when a test subject reports an Adverse Event (AE) or Serious Adverse Event (SAE) and the sponsor has concluded that they are obligated to pay the claim, they must report the date when the AE or SAE was reported as the Date of Incident (the date for which your "plan" becomes responsible) and report it as Ongoing Responsibility for Medicals.

 

CMS Teleconference -- 22 March 2012

At our prodding (see transcript posted at https://www.cms.gov/Medicare/Coordination-of-Benefits/MandatoryInsRep/NGHP_Transcripts.html incorrectly attributing our question to “David Hyatt from Hyatt Consulting”) Barbara Wright of CMS stated that:

 

“A physical cash payment is not required to accept ORM in general. What we’ve tried to say is where ORMs has been accepted for all injuries or complications by virtue of the sponsors’ initial agreement and an injury or complication occurs, that should then be reported as ORM.”

 

Summary

 

Unfortunately, many attorneys involved in analyzing whether or not they should recommend reporting to Medicare believe they are only responsible for reporting when they make a payment in excess of the payment they made to the clinical trial site to conduct the trial and assume these payment will be a tort  -- compensation in lieu of treatment or a settlement for negligence in conducting the trial.  Hopefully, we have demonstrated that is these are not situations of ongoing responsibility for medical coverage, rather represent one-time monetary awards that should be reported as “Total Payment Obligation to Claimant” or TPOC.