Managing Clinical Research Revenue Cycle to Improve the Bottom Line by Understanding Financial Strategies and Budget Negotiations

Sachit Verma, MD, MBA, FAPCR, CRCP
Director, Research Revenue and Billing Office of Research at Inova Health System

Abstract: Optimizing financial performance in the clinical research revenue cycle processes is important. This article outlines key steps in the clinical research revenue cycle and describes drivers of budget negotiations and the research billing continuum related to financial performance. Strategies and processes to enhance billing compliance to mitigate billing errors are highlighted.

Disclosures: The opinions expressed in this article are those of the speaker individually and do not reflect the policies or position of the speaker’s employer. The following information is for educational purposes only and should not be considered legal advice.


The revenue cycle for research billing identifies the opportunities for research revenue, the pitfalls of losses, and the risks associated with noncompliance with the regulatory requirements. Financial errors may occur during budgeting, patient identification, charge reconciliation, contracting, billing, invoicing, and collections (Table 1).

Development of the Medicare Coverage Analysis (MCA) is the first step in the revenue cycle for research billing. While MCA cannot solve all billing questions, it should be detailed enough to provide direction for back-end cost segregation. MCA is defined as a systematic review of protocol-related documents to determine the billing status of an item and services administered as part of a clinical trial. It provides an understanding of the appropriate payor—insurance or the study sponsor and an overview of protocol‐driven items and services that can be billed to Medicare and/or third-party payers in a billing plan pursuant to Medicare’s National and Local Coverage Determinations. Medicare is the gold standard, which other payers follow.

MCA allows clinical research professionals to understand reimbursement, thereby preventing billing errors and the consequences of submitting false or fraudulent claims to the government. It helps to protect the institution from violation of the False Claims Act. Also, MCA helps by increasing our understanding of potential loss of revenue due to improper budgeting, aids in budget negotiations, and streamlines billing compliance and financial liability.

Coverage of Clinical Research Items and Services

Medicare requires a three-part process for covering clinical research items and services. First, the study must be qualified for coverage. Second, items and services that are routine costs must be identified. While investigators use these terms in their own way, Medicare is looking for routine costs that are applicable to the disease being studied based on the guidelines. Third, specific routine costs must follow the Medicare rules for coverage within a clinical trial.

“Routine” cost is defined as “A. Usual care,” any items or services that are typically provided outside of a clinical trial (e.g., conventional care). “B. Expanded care,” provision of items or services required solely for the provision of the investigational item or service, for example, administration of a non-covered chemotherapeutic agent. Clinically appropriate monitoring of the effects of the item, or service, or the prevention of complications. “C. Investigational care,” items or services required for reasonable and necessary care arising from the provision of an investigational item or service or those needed for the diagnosis or treatment of complications.

“Non-routine” costs include investigational items and services provided free of cost and exclusively provided to determine trial eligibility or solely to satisfy data collection and analysis. These items and services are not used in the direct clinical management of the patient. For example, a clinical trial might require monthly scans; however, clinical care for the condition usually requires a single scan.

Other “non-routine” costs are items and services that:

  • Do not fall under a Medicare benefit category
  • Are statutorily excluded or that fall under a national non-coverage determination
  • Are customarily provided by the research sponsor free of charge for any enrollee in the trial.

Qualifying Clinical Trials

A qualifying clinical trial must meet all three necessary requirements in Part 1 and be a “Deemed” trial.

Part 1- First, the purpose of the trial must be to evaluate an item or service that falls within a Medicare benefit category (e.g., drugs and biologics, physicians’ service, durable medical equipment, or diagnostic tests, etc.). and is not statutorily excluded from coverage (e.g., cosmetic surgery and hearing aids).

Second, the trial must have therapeutic intent. It cannot be designed exclusively to test toxicity or disease pathophysiology.

Third, the trial of the therapeutic intervention must enroll patients with diagnosed disease rather than healthy volunteers.

Part II- The trial must be “deemed” to meet the Center for Medicare & Medicaid Services (CMS) seven desirable characteristics of a clinical trial (Table 2).

Therapeutic intent can be confusing. The definition of therapeutic intent is the prolongation of life, shrinkage of tumor, or improved quality of life, even in the absence of a cure or a dramatic improvement in a condition. Clinical research professionals should refer to the study objectives or the study endpoints to clearly determine whether the study has a therapeutic intent. For example, the study objective may be to evaluate the proportion of patients with an objective response to the targeted study agents in patients with advanced refractory cancers/lymphomas.

MCA Documentation

If the trial is a qualifying trial, there should be sufficient supporting documentation in the MCA from medical practice guidelines (e.g., NCCN, compendia, etc.), peer‐reviewed literature, significant textbooks, statements from professional organizations, and recommendations from the National Institutes of Health, etc. to support the designation of all conventional care. It must have justification from the billing rules and validation of billing routine cost based on NCD (National Coverage Determination) and LCD (Local Coverage Determination) guidelines.

Say, for example, that hepatic panels are required for screening in an oncology protocol. It is necessary to determine whether the test is required for research purposes or a part of the workup. The MCA will document, along with the coverage determination, what is and is not covered.

The MCA billing grid is an important tool to ensure appropriate billing to Medicare/private third-party payor or sponsor. The MCA billing grid must outline all items and services that are part of the protocol schedule of assessments, such as data collections, physical exams, laboratory tests, procedures, imaging scans, and chemotherapy drugs, with billing designation for various items and services.  

Successful Budgeting and Negotiations

The budget serves as a roadmap for the detailed assessment of the true cost to conduct the clinical trial. Successful budgeting is essential to ensuring that all study costs are covered.

When negotiating the budget, it is important to focus on the Big Picture and perform due diligence in providing justification and clarity of costs. The negotiating process should be fair and honest. Ensure that you establish a fee schedule/research chargemaster to review. The types of charges, such as direct, indirect, pass-through, professional, and technical fees should be considered and well-differentiated.

Every budget is different. The site should plan for reasonable reimbursement for the items and services in the protocol that they have determined as research related in the MCA. Overhead cost (also called indirect cost) is applied to patient care, procedures, and diagnostic expenses.

Potential hidden costs (time unaccounted for recruitment activities, monitoring visits, auditing, archiving and storage, study closeout, SAEs, etc.) must be included in the budget and be realistic to be invoiced.

Diagnostic costs should be pulled out of the per-patient payment and included in the pass-through costs. Ensure that you identify and are reimbursed for time and effort of protocol-related activities in the budget.

The sponsor budget outline can sometimes be vague about the timing of payments for invoiceable items. It is imperative to have that specificity (whether there will be a quarterly payment, etc.) in the payment section. Language about the standard of care should be clear in the budget. Therefore, it is important to carefully review the payment terms.

Under-budgeting will result in a deficit. It is crucial to have a proper understanding of the budget composition listed in the sponsor template. Quite often, the sponsor does not specify which items and services are standard of care and which are research-related. Clinical research professionals should use the MCA to clarify and define those items and services. When necessary, if something is not specified in the documents provided, it is better to ask the sponsor for items and services such as an optional procedure that is listed in the protocol calendar (tumor biopsies, for instance) but is not clear in the budget provided by the sponsor, and to request reimbursement for such items.

Clinical Research Revenue Cycle Pathways

Institutions should take major steps to ensure that the billing practices are appropriate to prevent compliance issues. The key to a successful research billing program is to approach it from a systems standpoint and to establish the front-end and back-end research revenue cycle pathways (Table 3).

It is necessary to have a solid process and incorporate crucial steps at the key time points in a revenue cycle to ensure billing compliance and to minimize financial risk. MCA is the starting point to assess financial feasibility and for establishing the cost in budgeting to help understand the complexity of clinical trial billing better in the clinical research revenue cycle continuum.

Performing a robust feasibility analysis to identify impactful criteria to predict the realistic capability to conduct a clinical trial is an initial determinant in a front-end research revenue pathway. The Protocol Review and Monitoring Committee must review and monitor the scientific conduct of the protocol. Considerations include whether the clinical research site has the necessary facilities, enrollment numbers, staff, and equipment for the study. During the COVID-19 pandemic, many study visits have been virtual. Therefore, the processes for a virtual study visit must have been considered and planned. Other considerations include whether the study is a qualifying clinical trial for the purpose of research-related reimbursement.

Having an MCA that is defensible for auditing and billing review right from the beginning of the study is important, and stakeholders involved in the process should have access to the MCA.

The clinical research site needs a consistent methodology for billing compliance. This includes good budget development and contract review processes. Clinical research professionals should perform a detailed review of the protocol and have a standard price list for research items and services that includes lists of CPT and HCPCS codes (e.g. CDM). All the documents (informed consent form, final MCA and budget, payment language) must be consistent.

Subject enrollment is the pivotal point in the back-end revenue cycle pathway. Clinical research professionals must understand the financial implications of not doing this correctly and know that the research and standard of care charges must be separated. Unfortunately, partial compliance is often seen in research billing.

Patients who are research subjects must be flagged as research subjects in the electronic medical record (EMR). To be able to link or associate a patient to a research study, the study-specific research record (RSH) is created. All research visits or encounters that are associated with that study are required to be linked to the research study to ensure appropriate billing.

It is crucial to have a bill hold mechanism in place to segregate research-related charges. Per the Medicare Claims Processing Manual, Chapter 32, Section 69.3, the billing provider must include information (Trial name, Sponsor, Sponsor‐assigned protocol number) in the beneficiary’s (subject’s) medical record. Claims must be reviewed carefully and should not bill without proper codes, modifiers, or National Clinical Trial (NCT) numbers. These claims must be accurate and follow other billing rules that require them to adequately document services that are medically necessary. Financial reconciliation must be done at the end of the study. Any errors should be reconciled, and money should be refunded to ensure that the study account is correct.

The bill hold review process starts with identifying subjects and placing all bills on hold for review. The date of service must be identified. Research charges must be identified and segregated based on the MCA and the billing grid. Adequate charge capture and segregation to clinical research accounts are necessary. The correct bill with the correct amount must be sent to the correct payer using the correct account.

Clinical Research Revenue Cycle Process Improvement

Table 4 provides an overview of research revenue cycle process improvement. A strong clinical research billing compliance program includes oversight of research billing before the study begins as well as during and after the study. It is important to do proactive claims review for all encounters where some or all charges are research-related and validate and approve the codes and modifiers. Clinical research professionals must also assess whether the charges are correct and have been appropriately identified as routine costs in a qualifying clinical trial and evaluate the institution’s ability to manage research-related charges. Process design and assessment should be used to facilitate proper billing in the research system, including a mechanism to enroll subjects in clinical trials and recognize their enrollment.

Good communication is necessary to ensure that stakeholders understand why clinical research billing compliance is necessary. Stakeholders include clinical investigators, patient financial services, the compliance team, the revenue cycle team, the research team, and the legal team. Clinical investigators must understand why their documentation is so important.

Documentation in the EMR system should be accurate based on what is medically necessary for clinical management. A thorough MCA that is mapped to the study protocol and a study budget should be prepared for every clinical trial. Processes should be established to properly bill to Medicare and other payers. The research revenue cycle improvement process should be standardized, analyzed, investigated, and validated.

Also, it is also important to understand technology and the bill hold and claims adjudication policy as well as to define roles, responsibilities, and competencies. Clinical research professionals must understand how the EMR and the clinical trial management system interface and what the clinical trial management system does. They should track metrics related to the EMR and the clinical trial management system.

The informed consent form must address patient financial responsibility and specify items and services that are covered by the research. An effective system for reconciling and monitoring is necessary so that items and services are not billed improperly to payers. The internal process should be compared to best practices.

Skills required for developing the MCA and the study budget include understanding of:

  • Research terminology
  • Protocols Items and services
  • National Coverage Determinations (NCDs) including NCD 310.1 and Local Coverage determinations (LCDs)
  • CMS rules and regulations
  • Budget and payment terms
  • Cost analysis
  • Codes and modifiers.

Also, the person developing the MCA and budget must be able to synthesize a great deal of information and be a good negotiator, adaptive and collaborative, and a constant learner.

Documentation in the medical record must provide an adequate reflection of the patient’s condition and the care or services provided.

Codes and modifiers must be used in claims for clinical trials. Claims must adequately document that the items and services are medically necessary. Q0 and Q1 modifiers are used on the billing claim form to characterize the item or service as investigational or a routine cost in a qualifying clinical trial:

  • Q0: Investigational (object of the trial) drug, device, or procedure
  • Q1: Routine.

Z00.6 diagnosis code needs to be reported in the secondary position. Z00.6 is a valid billable ICD-10 diagnosis code for an encounter for examination of a normal comparison and control in a clinical research program. Condition Code 30 must appear on the hospital claim for items/services related to a qualifying clinical trial regardless of whether all services are related to the clinical trial or not.

The NCT number is issued upon study registration with It is required on claims for items and services provided as part of a CMS-approved study or registry for outpatient hospital, professional, and inpatient hospital billing.

Consequences of Noncompliant Billing and Common Billing Errors Within the Clinical Research Revenue Cycle

Consequences of non-compliant billing include civil and criminal penalties. The Federal False Claims Act establishes liability for anyone who submits a false claim to the government. The government can exclude the institution from Medicare, Medicaid, and other federal programs. Noncompliant billing harms the reputation of the institution and leads to dissatisfied patients. The consequences of not following the research billing rules are significant.

There are many common billing errors. Information to manage revenue cycle complexities is usually gathered from various sources, making the process error-prone. One common billing error is not identifying research subjects. Some clinical research sites use flags in the EMR while others use pop-up alerts, colored banners, or a manual process for reviewing charges.

Sometimes, subjects do not follow the visit schedule. For example, in a cancer study, a subject who experiences toxicity may not follow the visit schedule. Bills can be sent too quickly and without a research billing review.

Other common errors occur when a physician orders a test or procedure that is slightly different than the test or procedure in the MCA or budget outline. Sometimes the tests and procedures in the amendment are not updated in the original budget; hence, the changes that should have been reflected are not reviewed, causing errors on the billing side. 

Errors in in-patient charges occur when the sponsor agrees to pay for room charges only, but other charges occur during an inpatient’s stay. The sponsor pays a flat fee for the inpatient stay that doesn’t cover all the tests and services. Without referencing the MCA and the budget, the bill could be sent to a third-party payer.

Screening procedures such as laboratory tests done for safety are another cause of common errors. Medicare will not pay for items and services in the absence of signs and symptoms except as specifically authorized by statute.

Improper billing can occur when the sponsor has agreed to pay for adverse events, but a claim is sent to a third-party payer or for IV administration with no study drug on claim. Medicare allows billing for IV administration for investigational drugs; however, sometimes the sponsor agrees to pay for this. Rules about the length of the IV administration and coverage need to be kept in mind.

It is difficult to track study invoices, and a lack of reconciliation of invoices can lead to billing errors. Study items and services often do not go through the research billing process and are not recognized as research charges.

Other common causes of billing errors are billing for non-qualifying clinical trials or double-billing the sponsor and insurance for the same item or service. Lack of understanding of the true costs of items and services, such as bundled costs for supplies used in infusions, also causes billing errors. Billing related to the preparation of chemotherapeutic agents can lead to billing errors.

Lack of understanding of the case rates or DRG codes used in targeted therapy studies can lead to erroneous billing of high-cost medications, while subjects who are admitted to the hospital in this treatment regimen are reimbursed by insurance.

CMS recommends that facility providers report drugs using the unique HCPCS code and under revenue code 636. Billing errors are also caused by a lack of syncing of the final documents: informed consent form, MCA, and budget.

Overall Clinical Research Revenue Cycle Process

Table 5 provides an overview of the clinical research revenue cycle process for study activities before, during, and after the study. A subject visit tracking log can be used to track and reconcile charges posted to the study fund.

The research workflow in Epic at the back-end consists of:

  • Study approval, clinical trial agreement execution, and enrollment:
    • Epic build
    • Epic Research Study Record (RSH)
  • Registration:
    • Linking subjects with encounters
    • Physician order entry
  • Charge entry generated from clinical activity:
    • Charge capture
    • Research billing review
  • Charge segregation and billing.

Process assessment in billing compliance for complex clinical trials starts with identification of the issue followed by assessment of the regulatory, financial, contractual, and legal risks of the issue. The next step is determining the probability that those errors may occur. Internal control and management are important steps in process assessment in billing compliance. The degree of control and management may be high, medium or low depending on the risk and the probability of the issue occurring again.

Problems can occur even if a clinical research site does everything right. For example, in the pandemic, it became impossible to meet the minimum enrollment requirements for clinical trials. As priorities change, new processes must be defined.

It is very important to have a system for assessing processes and issues. This facilitates the planning of a compliance workflow and the evaluation of resources. For example, the institution wants to conduct targeted therapy trials that require infrastructure. The risk of these studies must be assessed. Sometimes the assessment is a high-level overview. Other times, a detailed strategy is developed.

Each clinical research site must assess what is right for the institution. Gaps are identified and must be assessed. For example, in CAR T-cell therapy studies, prolonged hospitalization is possible. The MCA must address whether this will be paid by insurance or research as well as who is paying for chemotherapy. Medicare recognizes that lymphodepletion chemotherapy is part of CAR T-cell therapy.

Oncology trials are complex, and the budget is based on the different number of arms that the study requires. The MCA and the budget must account for all necessary activities in a multi-arm study. Eligibility criteria determine who can participate in clinical trials, and at times strict eligibility criteria are challenging in terms of subject enrollment.

Clinical research professionals must identify the issues related to research billing, evaluate the risks, coordinate with various teams, and establish priorities because these studies are time-sensitive. It is necessary to do a complete audit of billing compliance with an understanding of the available institutional resources for managing risk.


Research billing is complex and challenging. The billing and compliance structure should be organized into a single entity. Good communication is necessary among all the people who are involved at the front-end and back-end of research billing so that each team knows what everybody else is doing. Entrepreneurial thinking is key in establishing a research revenue cycle that can improve the institution’s bottom line.


Research Billing Compliance

  • Medicare Coverage Analysis (MCA) reimbursement analysis
  • Budgeting and contracting
  • Research versus standard of care charge capture
  • Charge segregation and billing
  • Invoicing and collection


Deemed Clinical Trials

  • Deemed trial:
    • Trials funded or supported by centers or cooperative groups that are funded by the:
      • National Institutes of Health
      • Centers for Disease Control and Prevention
      • Agency for Healthcare Research and Quality
      • Centers for Medicare & Medicaid Services
      • Department of Defense
      • Veterans Administration
    • Trials conducted under an Investigational New Drug (IND) application reviewed by the FDA
    • Drug trials that are exempt from having an IND under 21 CFR 312.2(b)(1)
  • Desirable characteristics:
    • The principal purpose of the trial is to test whether the intervention potentially improves the participants’ health outcomes
    • The trial is well-supported by available scientific and medical information or it is intended to clarify or establish the health outcomes of interventions already in common clinical use
    • The trial does not unjustifiably duplicate existing studies
    • The trial design is appropriate to answer the research question being asked in the trial
    • The trial is sponsored by a credible organization or individual capable of executing the proposed trial successfully
    • The trial is in compliance with Federal regulations relating to the protection of human subjects, and
    • All aspects of the trial are conducted according to the appropriate standards of scientific integrity.


Clinical Research Revenue Cycle Pathway

  • Front-end pathway:
    • Feasibility Analysis
    • Protocol Review and Monitoring Committee (PRMC) review
    • Protocol document review
    • Qualifying clinical trial
    • MCA billing grid
    • Internal budget
    • Cost review
    • Negotiation with the sponsor
    • Concordance of MCA, final budget, informed consent form, and payment language
    • Clinical Trial Agreement (CTA) execution
    • Institutional Review Board (IRB) approval
  • Back-end pathway:
    • Enrollment after signing the informed consent form
    • Flagging of Research Subjects
    • Encounter linkage
    • Charge entry
    • Charge capture
    • Bill hold and coding
    • Billing and invoicing


Clinical Research Revenue Cycle Process Improvement

  • Proactive claims review
  • Process design and assessment
  • Reconciliation and monitoring
  • Documentation in the EMR system
  • Thorough MCA and compliance recommendations
  • Metrics tracking:
    • Technology such as EMR and clinical trial management system (CTMS)
  • Bill hold and claims adjudication policy
  • Defined roles, responsibilities, and competencies


Clinical Research Revenue Cycle Process

  • Pre-study activities:
    • Qualifying clinical trial and MCA billing grid
    • Budget, informed consent form, and clinical trial agreement
    • Financial:
      • Study account
  • Study activities:
    • Subject enrollment and flagging subjects
    • Order entry, schedule, and linking encounters
  • Post-study activities:
    • Research billing review
    • Review of charges in the EMR against the MCA
    • Charge segregation and billing
    • Development of matrix billing plan


National Coverage Determination (NCD) for Routine Costs in Clinical Trials

Centers for Medicare and Medicaid Services (CMS), Medicare Claims Processing Manual, Chap. 32 – Billing Requirements for Special Services

Medicare Coverage ~ Clinical Trials – CMS

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