DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
 
 
              SMD # 21-005 
 
RE:  UPDATED: Mandatory Medicaid   
Coverage of Routine Patient Costs 
Furnished in Connection with 
Participation in Qualifying Clinical 
Trials 
 
 
April 13, 2022 
 
Dear State Medicaid Director: 
 
The Center for Medicaid and CHIP Services (CMCS) is issuing this State Medicaid Director 
Letter outlining new Medicaid state plan requirements for assuring coverage of routine patient 
costs associated with participation in qualifying clinical trials.  This guidance applies to states 
and territories with respect to items and services furnished to Medicaid beneficiaries, including 
beneficiaries enrolled in Alternative Benefit Plans (ABPs), who are participating in a qualifying 
clinical trial on or after January 1, 2022.   
 
Background 
Historically, the Medicaid statute and its implementing regulations did not specify a clear 
requirement for coverage of routine costs associated with clinical trials, even if those routine 
costs were for items and services that ordinarily would be covered by a states Medicaid 
program.  Therefore, states (including the territories, unless otherwise noted) have had the 
flexibility to limit or exclude coverage for routine costs associated with clinical trials by defining 
medical necessity criteria, provider qualifications and limits on the amount, duration, and scope 
of services.  Some states historically have determined that all services provided to a Medicaid 
beneficiary participating in a clinical trial were considered experimental, and therefore not 
covered by Medicaid.  On the other hand, we explained in guidance regarding dually eligible 
Medicare and Medicaid beneficiaries issued on October 30, 2000, that Medicaid may pay for 
otherwise covered services that are routine costs for clinical trials, provided all applicable 
requirements are met, including third party liability requirements.1  To date, this State Medicaid 
Director Letter is the only guidance we have issued addressing Medicaid coverage of routine 
costs for clinical trials. 
 
Mandatory Services  
Division CC, Title II, Section 210 of the Consolidated Appropriations Act, 2021 (Public Law 
116-260) (section 210) amended section 1905(a) of the Social Security Act (the Act), by adding 
to the definition of medical assistance a new benefit at section 1905(a)(30) for routine patient 
costs for items and services furnished in connection with participation by Medicaid beneficiaries 
                                                 
1 https://www.medicaid.gov/Federal-Policy-Guidance/downloads/smd103000.pdf 
 
The contents of this document do not have the force and effect of law and are not meant to bind the public in any 
way, unless specifically incorporated into a contract.  This document is intended only to provide clarity to the public 
regarding existing requirements under the law.   
in qualifying clinical trials, subject to further provisions in a new section 1905(gg).  Section 210 
also amended sections 1902(a)(10)(A) and 1937(b)(5) of the Act to make coverage of this new 
benefit mandatory under the state plan and any benchmark or benchmark equivalent coverage 
also referred to as alternative benefit plans, or ABPs with respect to items and services furnished 
on or after January 1, 2022. 
 
Pursuant to section 1905(a)(30) and 1905(gg)(1) of the Act, the routine patient costs that must be 
covered for a beneficiary participating in a qualifying clinical trial are any item or service 
provided to the individual under the qualifying clinical trial, including any item or service 
provided to prevent, diagnose, monitor, or treat complications resulting from participation in the 
qualifying clinical trial, to the extent that the provision of such items or services to the 
beneficiary would otherwise be covered outside the course of participation in the qualifying 
clinical trial under the state plan or waiver, including a demonstration project under section 1115 
of the Act.  Such routine services and costs also include any item or service required solely for 
the provision of the investigational item or service that is the subject of the qualifying clinical 
trial, including the administration of the investigational item or service.  Some examples of 
routine costs in a clinical trial could include otherwise covered physician services or laboratory 
or medical imaging services that assist with prevention, diagnosis, monitoring or treatment of 
complications arising from clinical trial participation.  
 
Items and Services Not Covered Under the New Mandatory Benefit2 
As described under section 1905(gg)(1) of the Act, routine patient costs within the meaning of 
section 1905(a)(30) of the Act do not include any investigational item or service that is the 
subject of the qualifying clinical trial and is not otherwise covered outside of the clinical trial 
under the state plan, waiver, or demonstration project.   
 
Similarly, routine patient cost does not include any item or service that is provided to the 
beneficiary solely to satisfy data collection and analysis for the qualifying clinical trial that is not 
used in the direct clinical management of the beneficiary and is not otherwise covered under the 
state plan, waiver, or demonstration project.  For example, if a beneficiary has a condition that 
typically requires monitoring through an annual medical imaging scan and the beneficiary is 
participating in a clinical trial with a protocol that requires monthly medical imaging scans only 
to collect data on the effects of the investigational item or service, the additional monthly scans 
for purposes of clinical trial data collection would not be included in the beneficiarys routine 
patient costs to the extent they are not used for the direct clinical management of the beneficiary 
or are not otherwise covered under the state plan, waiver, or demonstration project. 
 
Qualifying Clinical Trial 
Section 1905(gg)(2) of the Act defines the term qualifying clinical trial for purposes of section 
1905(a)(30) of the Act as a clinical trial in any clinical phase of development that is conducted in 
relation to the prevention, detection, or treatment of any serious or life-threatening disease or 
condition, and is described in any of clauses (i)-(iii) of section 1905(gg)(2)(A) of the Act.  
Therefore, to meet the statutory definition, the qualifying clinical trial must also be one or 
more of the following: 
                                                 
2 This section has been updated. 
   
  A study or investigation that is approved, conducted, or supported (including by funding 
through in-kind contributions) by one or more of the following: 
  
  The National Institutes of Health (NIH); 
o
  The Centers for Disease Control and Prevention (CDC);  
o
  The Agency for Health Care Research and Quality (AHRQ); 
o
  The Centers for Medicare & Medicaid Services (CMS);  
o
  A cooperative group or center of any of the entities described above or the 
o
Department of Defense or the Department of Veterans Affairs; 
  A qualified non-governmental research entity identified in the guidelines 
o
issued by the NIH for center support grants3;  
  A clinical trial, approved or funded by any of the following entities, that has been 
reviewed and approved through a system of peer review that the Secretary determines 
comparable to the system of peer review of studies and investigations used by the 
NIH, and that assures unbiased review of the highest scientific standards by qualified 
individuals with no interest in the outcome of the review: 
  The Department of Energy 
o
  The Department of Veterans Affairs 
o
  The Department of Defense;  
o
  A clinical trial that is one conducted pursuant to an investigational new drug 
exemption under section 505(i) of the Federal Food, Drug, and Cosmetic Act or an 
exemption for a biological product undergoing investigation under section 351(a)(3) 
of the Public Health Service Act; or 
  A clinical trial that is a drug trial exempt from being required to have one of the 
exemptions in the prior bullet. 
 
Coverage Determination Requirements 
As provided in section 1905(gg)(3) of the Act, a determination with respect to coverage under 
section 1905(a)(30) of the Act for a beneficiary participating in a qualifying clinical trial must be 
expedited and completed within 72 hours and must be made without regard to the geographic 
location or network affiliation of the health care provider treating the beneficiary or the principal 
investigator of the qualifying clinical trial. This means that states must review and adjust, as 
necessary, any existing utilization management processes to ensure a coverage determination is 
completed within 72 hours.  We interpret the geographic location or network affiliation 
requirement to mean that a state or territory may not deny coverage of routine patient costs based 
on where the clinical trial is conducted, including out of state, or based on whether the principal 
investigator or provider treating the beneficiary in connection with the clinical trial is outside of 
the network of the beneficiarys Medicaid managed care plan, if applicable.  In the latter case, if 
a positive coverage determination is made, the state may either pay for the covered services on a 
fee-for-service basis as outside the scope of the managed care contract or require the managed 
care plan to cover the services out-of-network when the coverage requirement applies. 
   
                                                 
3 While Section 210 of the Consolidated Appropriations Act references a qualified non-governmental research entity 
identified in the guidelines issued by the NIH for center support grants, NIH has clarified that no such guidelines 
exist.  
   
Coverage must also be based on an attestation regarding the appropriateness of the qualifying 
clinical trial by the health care provider and principal investigator and be made using a 
streamlined uniform form developed for state use by the Secretary, which is currently under 
development, and that will include the option to reference information regarding the qualifying 
clinical trial that is publicly available on a website maintained by the Secretary, such as 
clinicaltrials.gov.  Further, coverage determinations must not require submission of the protocols 
of the qualifying clinical trial or any other documentation that may be proprietary or determined 
by the Secretary to be burdensome.    
 
States that use a managed care delivery system must either cover the costs as required outside the 
scope of its managed care contracts or specify the applicable requirements in their managed care 
plan contracts and adjust capitation rates as appropriate for items and services furnished to 
Medicaid beneficiaries on or after January 1, 2022.   
 
Exemption of Additional Expenditures from Payment Limits for Territories  
Section 210 amended section 1108(g)(4) of the Act to include a new subparagraph (B), providing 
that expenditures for routine patient costs, as defined in section 1905(gg)(1), will not be taken 
into account in applying the allotment caps for the territories under 1108(f) of the Act. This 
provision is also effective for items and services furnished on or after January 1, 2022. 
  
Exception for State Legislation4 
States that require legislative changes to implement coverage of routine patient costs as specified 
in section 1905(a)(30) of the Act will not be regarded as failing to comply with the requirements 
newly added by section 210, solely on the basis of their failure to meet these requirements 
before the first day of the first calendar quarter beginning after the close of the first regular 
session of the state legislature that begins after December 27, 2020, the date of enactment of the 
Consolidated Appropriations Act, 2021. For states that have a two-year legislative session, each 
year of the session is considered a separate regular session of the state legislature for purposes of 
this exception.   
 
Essentially, this provision provides for an extension to the required start date of the new 
coverage requirement if the only reason the state cannot come into compliance by January 1, 
2022 is due to lack of state legislation that is needed to meet the requirement. Not all states will 
be able to seek this extension, because it depends on the timing of the states first regular 
legislative session that began after the date of enactment of the Consolidated Appropriations Act, 
2021. If the Secretary determines that state legislation is needed to bring the state plan into 
compliance with the new coverage requirement, the Secretary will not consider the state to be out 
of compliance with the new coverage requirement solely on the basis of a failure to enact the 
required state legislation before the first day of the first calendar quarter beginning after the close 
of the first regular session of the states legislature that begins after December 27, 2020. If a 
states first regular legislative session beginning after December 27, 2020, was the calendar year 
that began on January 1, 2021, and ended on December 31, 2021, the state would not be able to 
seek this extension because it would have had only until December 31, 2021, to enact any 
required legislation, and the first day of the first calendar quarter that begins after that date is 
January 1, 2022  the effective date for this provision.   
                                                 
4 This section has been updated. 
   
 
If, however, a states first regular legislative session beginning after December 27, 2020, does 
not end until on or after January 1, 2022, and the Secretary determines that legislation was 
necessary to meet the new coverage requirement, but the necessary legislative authorization was 
not obtained, the state could seek to delay compliance with the new coverage requirement until 
the first day of the first calendar quarter after the legislative session ends. Such a state is 
expected to come into compliance with the new coverage requirement by the first day of the first 
calendar quarter after the end of the legislative session. If a state has a two-year legislative 
session, each year of the session shall be considered to be a separate regular session of the state 
legislature for purposes of this extension. This means that a state would not have a longer 
extension if it has a two-year legislative session; such a state is treated like a state with a one-
year legislative session, and any applicable extension ends on the first day of the first calendar 
quarter following the end of the first year of the two-year session.  
 
CMS will grant an extension based on legislative delay only if the timing of the states legislative 
session is the only reason that a state cannot meet the requirement, and only when the first 
regular legislative session that began after December 27, 2020, ends on or after January 1, 2022, 
as discussed above. States should submit requests for the legislative delay extension on or before 
January 1, 2022, to the Regional SPA/Waiver mailbox that is currently used for Medicaid SPA 
submissions. If the state is participating in the pilot for the new One CMS Portal, the request 
for the legislative delay extension should be submitted via the portal. The request should include 
documentation to support that the states first regular legislative session that began after 
December 27, 2020, did not end until on or after January 1, 2022, that state legislation is needed 
to come into compliance with the new coverage requirement, and that the legislative delay is the 
only reason the state cannot come into compliance as of January 1, 2022. States may, but are not 
required to, use the following format for their legislative delay extension submission:  
 
_____ [Insert name of state] requests an exception based on the need for legislative authority to 
cover the benefit described in section 1905(a)(30) of the Social Security Act, and submits 
documentation to support that the states first regular legislative session that began after 
December 27, 2020, will not end until on or after January 1, 2022. [Describe the documentation 
that is attached or that accompanies the request and include information about the states 
legislative calendar so CMS can determine the states compliance date.]  
 
States that are granted an extension due to legislative delay will still need to follow the state plan 
amendment (SPA) submission requirements below and submit a SPA consistent with the 
extended compliance deadline. 
 
State Plan Amendments 
States will need to submit a new SPA at section 3.1A and 3.1B to effectuate this new coverage 
requirement under section 1905(a)(30), effective with respect to items and services furnished on 
or after January 1, 2022, unless the exception for state legislation described above applies.  
Additionally, a state will need to submit a SPA at section 4.19(b) to describe payment 
methodologies that will be used to pay service providers.  Changes in methods and standards for 
payments associated with the 4.19(b) SPA are subject to the public notice requirements at 42 
CFR 447.205, which must be issued at least one day prior to the effective date of the proposed 
   
changes.  These SPAs are needed to ensure that the state is appropriately covering and paying for 
routine patient costs of items and services for beneficiaries enrolled in qualifying clinical trials, 
as newly required under amendments made by section 210.  Similarly, states will need to submit 
ABP SPAs to add this coverage to their ABPs.  ABP SPA public notice requirements under 42 
CFR 440.386 must be followed.  CMS is available for technical assistance on SPA submissions.  
States using a managed care delivery system should also evaluate their managed care plan 
contracts and capitation rates to determine the need for potential revisions with respect to items 
and services furnished to Medicaid beneficiaries on or after January 1, 2022, such as whether to 
carve out such costs so the state would provide them outside the scope of the contract or include 
appropriate amounts in capitation rates to cover an obligation to cover the out of network costs. 
 
For additional information, please contact Kirsten Jensen, Director, Division of Benefits and 
Coverage, at Kirsten.Jensen@cms.hhs.gov. 
 
          Sincerely, 
           
          Daniel Tsai 
          Deputy Administrator and Director