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CMS – Letter – Primary Payor

DEPARTMENT OF HEALTH & HUMAN SERVICES

Centers for Medicare & Medicaid Services

7500 Security Boulevard, C3-14-16

Baltimore, Maryland 21244-1850

Office of Financial Management/Financial Services Group

APR 1 2004

Dear [redacted]

I write to respond to your recent e-mail inquiry to Mr. Paul Olenick (copy enclosed). Specifically, you asked Mr. Olenick whether Medicare would be the primary payer for services related to the complications arising from the implantation of investigational devices if the trial sponsor states in its consent documentation that it would "pay for medically necessary services related to injuries received as a result of participation in this trial, provided that these services are not otherwise covered by another payor." The Centers for Medicare & Medicaid Services (CMS) believes that Medicare would not be the primary payer in such a situation.

The Medicare statute precludes payment when "payment has been made or can reasonably be expected to be made under a liability insurance policy or plan (including a self-insured plan). 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 fail-tire to obtain insurance, or otherwise) in whole or in part." 42 U.S.C. § 1395y(b)(2)(A)(ii). The clinical trial sponsor's agreement with trial participants that it will pay for medically necessary services related to injuries participants may receive as a result of participation in the trial constitutes a plan or policy of insurance under which payment can reasonably be expected to be made in the event such an injury occurs. A liability insurance policy or plan must make payment without regard to an individual's Medicare eligibility, 42 C.F.R. § 411.32(a)(1). Therefore, Medicare will not make payment if it is aware of a situation such as you described.


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