The Medicare program has, from its inception, sought to balance its duty to safeguard the Medicare trust, with its statutory obligation to pay only for "reasonable and necessary" health care for Medicare beneficiaries, and to honor the government's promise that its elderly and disabled citizens will receive the best that modern medicine has to offer. Modern medicine is expensive, and costs continue to rise, fueled by an influx of new medical technology and the fast approach toward Medicare eligibility for millions of baby-boomers. The Centers for Medicare and Medicaid Services (CMS) face legal and political restraints with respect to its ability to control costs. Although CMS has discretion in determining how much it will pay for new items and services, it does not have explicit statutory authority to consider cost when deciding whether to cover the intervention in the first instance. Faced with conflicting obligations and statutory restraints, CMS has endeavored to reduce costs, particularly with regard to expensive new technology, through an initiative known as Coverage with Evidence Development (CED). This new coverage policy, published by CMS on July 12, 2006, consists of two arms. The second, more controversial arm of CED is called Coverage with Study Participation (CSP). Under this program, CMS will pay for certain new medical tests, treatments, and biotechnology products, even though it deems the medical evidence insufficient to merit broad national coverage, provided that the services are received in the context of a prospective clinical trial aimed at generating additional evidence. Thus, CSP would restrict payment for certain services to a limited group of Medicare beneficiaries who "agree" to participate in a clinical trial.

The idea of linking coverage to clinical research is not entirely new. In 1995, CMS conditioned payment for an innovative surgical procedure upon patient participation in a clinical trial. In that instance, CMS commenced a seven year clinical trial to compare the outcomes of emphysema patients who underwent lung volume reduction surgery with those patients who were given comprehensive pulmonary rehabilitation. In the face of vigorous opposition from provider representatives and some members of Congress, CMS restricted payment for lung volume reduction surgery to beneficiaries treated according to a clinical trial protocol. In a 2005 trial involving the use of FDG-PET scans to diagnose certain cancers, CMS conditioned coverage of the scans on participation in a prospective clinical trial or registry." Also in 2005, CMS conditioned coverage of implantable cardioverter defibrillators (ICDs) used for certain indications on participation in a clinical trial or registry. Prior to the publication of its July 2006 "Coverage with Evidence Development" guidelines, however, CMS had not explained its authority for linking coverage with participation in research.