Overview of Medicare Coverage of Clinical Trials

Abstract

The Social Security Act establishes several criteria that must be satisfied in order for an item or service to be eligible for reimbursement under the Medicare program. These threshold Medicare coverage criteria include the requirement that the item or service be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member. Administrators of the Medicare program have generally held that experimental therapies are not reasonable and necessary. This interpretation of the reasonable and necessary criteria traditionally precluded Medicare coverage for services provided to beneficiaries as part of clinical investigations. Denying Medicare reimbursement for investigational interventions and costs related thereto created a barrier to Medicare beneficiaries’ participation in clinical trials. This posed a dual problem. First, in the short term, it could deny Medicare beneficiaries access to potentially useful therapies available in the clinical trial context. Second, limited enrollment of Medicare beneficiaries in clinical trials hindered collection of sufficient evidence to demonstrate a new therapy’s effectiveness for use in the Medicare population.