Not every clinical trial billing question is answered by National Coverage Determination (NCD) 310.1. When the investigational product is a medical device studied under an FDA Investigational Device Exemption (IDE) rather than a drug or biologic under an Investigational New Drug (IND) application, Medicare coverage runs on a separate regulatory track entirely — one built around a two-tier classification the FDA assigns to every IDE: Category A and Category B. That classification, not the trial’s phase or the sponsor’s budget, is what determines whether Medicare will ever pay for the device itself.
This guide walks through what Category A and Category B mean, what Medicare actually covers under each, and how the device-trial coverage framework differs from the drug/biologic routine-cost rules research administrators may already know from NCD 310.1.
What an IDE Study Is, Briefly
An Investigational Device Exemption allows a device that has not yet received FDA marketing approval or clearance to be used in a clinical study to collect the safety and effectiveness data needed to support a future 510(k) or PMA submission. Without an approved IDE, shipping and using an unapproved device in human subjects would otherwise violate FDA’s device marketing requirements. As part of approving an IDE application, FDA also assigns the study’s device to one of the two coverage-relevant risk categories described below — a step with no real analogue in drug/biologic trial regulation.
Category A vs. Category B: The FDA Classification That Drives Coverage
FDA’s IDE categorization is a risk-based determination made at the time the IDE is approved (and revisited as evidence accumulates), and it is separate from the device’s later FDA marketing classification (Class I/II/III):
- Category A (Experimental): the device’s underlying “absolute risk” has not yet been established — FDA has not yet resolved the initial questions of whether that type of device can be safe and effective at all. This is the higher-uncertainty category, typically reserved for genuinely novel device types.
- Category B (Nonexperimental/Investigational): the initial safety-and-effectiveness questions for that device type have already been resolved (often because a similar device type already has FDA clearance or approval); what remains open is incremental risk — how this specific device compares, in a narrower sense, to what’s already established. This is the lower-uncertainty category.
The category is documented in the sponsor’s IDE approval letter from FDA. A research billing office cannot infer it from the device type alone and should not bill against an assumption — confirm the category directly from the study’s regulatory documentation before claims go out. Categorization also is not necessarily permanent: as a study generates more safety and effectiveness data over a multi-year trial, FDA can update a device’s category, which changes prospective Medicare coverage from that point forward.
What Medicare Covers for Category A (Experimental) Device Studies
For a Category A IDE study, Medicare’s coverage is narrower:
- Routine care items and services furnished to the beneficiary during the study (the same kind of routine-cost coverage familiar from qualifying drug/biologic trials) may be covered, provided the study satisfies the applicable coverage criteria.
- The device itself is statutorily excluded from coverage. No amount of documentation or trial design changes that outcome for a Category A device — Medicare will not pay for the investigational item.
What Medicare Covers for Category B (Nonexperimental/Investigational) Device Studies
Category B studies open up a coverage path the Category A tier does not have:
- Routine care items and services may be covered on the same basis as above.
- The device itself may also be covered — but only if CMS determines, before the first related claim is submitted, that the study meets Medicare’s IDE coverage criteria. This is not automatic simply because FDA categorized the device as B; CMS coverage confirmation is a separate step.
- Payment for the device is capped, not open-ended: Medicare pays no more than it would have paid for a comparable device already cleared or approved for marketing and serving the same medical purpose. A facility should not expect reimbursement at the sponsor’s list price or acquisition cost for the investigational unit.
In practice, this means the same underlying question — “does Medicare pay for the device?” — has a hard no for Category A and a conditional, capped yes for Category B, contingent on CMS’s own coverage determination for that specific study, not just FDA’s categorization.
Confirming Coverage Status Before Billing
Because two separate federal determinations are involved — FDA’s Category A/B assignment and CMS’s own coverage sign-off for a Category B study — research billing offices should treat this as a two-part check, not a one-time lookup:
- Confirm the FDA category from the sponsor-provided IDE approval letter or the study’s regulatory binder, not from a general description of the device.
- For Category B studies, confirm CMS has issued its own coverage determination for that specific study before any related claim is submitted — CMS maintains coverage information for IDE studies on its Medicare Coverage Database, and Medicare Administrative Contractors (MACs) publish local guidance on how to verify a study’s status. Do not submit device-cost claims on the assumption that Category B automatically means CMS has already signed off.
Coding conventions for IDE claims (routine-service versus investigational-item modifiers, and the condition code used to flag a clinical-trial claim) are documented in CMS’s Medicare Claims Processing Manual and are subject to periodic transmittal updates — confirm current instructions with the study’s MAC rather than relying on a modifier list that may have since changed. Billing a Category A device’s cost to Medicare, or billing a Category B device before CMS coverage is confirmed, is a documented source of clinical-trial billing compliance risk; see CASRAI’s clinical trial billing compliance checklist for the broader set of routine-cost pitfalls this sits alongside.
How This Differs from NCD 310.1 Drug and Biologic Trial Coverage
Research administrators who already know NCD 310.1 from drug and biologic trial billing should not assume it governs device studies too — it doesn’t, and applying its logic to an IDE study is a common source of confusion:
- Different regulatory basis. NCD 310.1 (routine costs in qualifying clinical trials) is built around a “qualifying clinical trial” test with deeming criteria such as conduct under an FDA IND. IDE device coverage instead runs on its own dedicated regulation, 42 CFR 405.201–405.215 (“Medical Services Coverage Decisions That Relate to Health Care Technology,” Subpart B) — a distinct legal basis with its own criteria, not an application of NCD 310.1 to devices.
- No A/B-style risk tier for drugs. NCD 310.1 does not split drug or biologic trials into two coverage tiers based on a risk classification the way IDE studies are split into Category A and Category B. The device framework’s two-tier structure has no equivalent on the drug/biologic side.
- The product itself can be covered under one framework but never the other in the same way. Under NCD 310.1, Medicare’s routine-cost coverage generally does not extend to the investigational drug or biologic itself either (that is typically supplied by the sponsor) — but Category B device coverage is unusual precisely because it creates a real, if capped and conditional, path for Medicare to pay for the investigational item itself, which has no direct drug-trial parallel.
Because the two frameworks are genuinely separate, a research billing office running both device and drug/biologic trials needs two different coverage-verification workflows, not one shared checklist.
Frequently Asked Questions
Who decides whether an IDE device is Category A or Category B?
FDA makes the determination as part of approving the IDE application, documented in the approval letter. CMS does not assign the category, but CMS does make its own separate coverage determination for Category B studies before device-cost claims can be paid.
Does Medicare ever pay for a Category A (experimental) device?
No. The device itself is statutorily excluded from Medicare coverage regardless of documentation, trial design, or CMS review. Only routine care items and services furnished during a qualifying Category A study may be covered.
How much does Medicare pay for a covered Category B device?
Payment is capped at what Medicare would have paid for a comparable device already cleared or approved for marketing and serving the same medical purpose — not the sponsor’s cost or list price for the investigational unit.
Can a device’s category change during a trial?
Yes. FDA’s categorization reflects the state of safety-and-effectiveness evidence at a point in time and can be updated as a study accumulates more data over a multi-year trial. Billing offices should confirm the category is still current rather than relying on the original IDE approval letter indefinitely for a long-running study.
Does NCD 310.1 apply to IDE device studies?
No. IDE device coverage is governed by a separate regulatory basis — 42 CFR 405.201–405.215 — not by NCD 310.1, which addresses routine costs in qualifying drug and biologic trials. See CASRAI’s NCD 310.1 entry for that separate framework.
Where can a billing office verify CMS’s coverage determination for a specific IDE study?
CMS publishes coverage information for approved IDE studies through its Medicare Coverage Database, and the study’s Medicare Administrative Contractor can confirm current status and billing instructions. Sponsors should also be able to provide the CMS coverage determination alongside the FDA IDE approval letter.
