How to "research" your "clinical research" billing compliance

Clinical trials are research studies which explore the overall efficacy of a medical strategy, treatment, or device, as compared to conventional treatment.  The trials are crucial in determining the safety of medical interventions, and the ability to achieve specific health outcomes.  Hospitals and health systems participating in clinical trials enjoy many benefits such as the prestige of being a research organization, the ability to provide the most current treatment options to patients along with opportunities for revenue.  While the items mentioned above provide considerable benefits, to ensure appropriate reimbursement while mitigating risk, a hospital must establish an effective documentation and billing processes which can often be described as formidable and complex! 
Routine diagnostic reviews of the clinical trial revenue cycle are crucial to ensuring your program is operating effectively.  A summary of the regulatory guidance, potential revenue cycle risks and audit strategies are described below.


Regulatory Guidance

 In 2007, the Centers for Medicare and Medicaid Services (“CMS”) published National Coverage Determination (“NCD”) 310.1 for Routine Costs in Clinical Trials in an effort to provide detailed coverage information for clinical trials.  Per the NCD, Medicare fee for service covers the routine costs of qualifying clinical trials, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in all clinical trials.  All other Medicare rules also still apply.  The requirements set forth to qualify for a clinical trial, and definitions for routine costs, are described in more detail below.

1. Qualifying Clinical Trials  

  • The subject or purpose of the trial must be the evaluation of an item or service that falls within a Medicare benefit category (e.g., physician’s service, durable medical equipment, diagnostic test) and is not statutorily excluded from coverage (e.g., cosmetic surgery, hearing aids).
  • The trial must have therapeutic intent. 
  • The trial must enroll patients with diagnosed disease rather than healthy volunteers.  Trials of diagnostic interventions may enroll healthy patients in order to have a proper control group.

In additional to the three requirements above, clinical trials should also have the following desirable characteristics to qualify for Medicare coverage of routine costs. 

  • 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 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 of 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.  

Some trials are deemed to have the above characteristics and automatically qualify as follows:

  • Trials funded by the National Institute of Health (“NIH”), Center for Disease Control (“CDC”), Agency for Healthcare Research and Quality (“AHRQ”), CMS, Department of Defense (“DOD”) and Veterans Affairs (“VA”);
  • Trials supported by centers or cooperative groups that are funded by the NIH, CDC, AHRQ, CMS, DOD and VA;
  • Trials conducted under an investigational new drug application (“IND”) reviewed by the Food and Drug Administration (“FDA”); and
  • Drug trials exempt from having an IND under 21 CFR 312.2(b)(1).

2. Routine Costs  

Routine costs of a qualified clinical trial include all items and services that are otherwise generally available to Medicare beneficiaries as follows:

  • Items or services that are typically provided absent a clinical trial (e.g., conventional care);
  • Items or services required solely for the provision of the investigational item or service, the clinically appropriate monitoring of the effects of the item or service, or the prevention of complications; and
  • Items or services needed for reasonable and necessary care arising from the provision of an investigational item or service, in particular, the diagnosis or treatment of complications.  

Items or services NOT included in routine costs are as follows:

  • The investigational item or service itself;
  • Items and services provided solely to satisfy data collection and analysis needs that are not used in direct clinical management of the patient; and
  • Items and services customarily provided by the research sponsors free-of-charge for any enrollee in the trial. 


Potential Revenue Cycle Risks

Non-compliant billing can result in severe penalties, including insurance fraud charges under the False Claims Act.  The five highest risk areas providers should properly assess and implement safeguards are as follows:

  • Billing for services that are already paid by the sponsor (double billing).
  • Billing for services promised for free in the informed consent.
  • Billing for services that are for research-purposes only.
  • Billing for services that are part of a non-qualifying clinical trial.
  • Billing a Medicare Advantage Plan when the local Medicare Administrative Contractor (“MAC”) should be billed.


Audit Strategies

I. Clinical Trial Documentation

The cause of most research billing compliance risk is a breakdown in coordination of clinical trial documentation therefore, it is important to coordinate what clinical trials are being performed, which patients are enrolled in these trials, and which services should be charged to the sponsor versus Medicare. The following best practice clinical trial documents are integral to compliant clinical trial billing.

a. Medicare Coverage Analysis (“MCA”)The MCA enables a systematic review of research related documents to determine the Medicare billing status of both the study itself, and all items and services provided to patients enrolled that are required by the clinical trial.

b. Clinical Trial Agreement (“CTA”)  
The CTA identifies the obligations of parties involved in the study and further defines what services are to be performed and how much will be paid.  This document must be congruent with the MCA, protocol, billing determination and informed consent.

c. Informed Consent Form (“ICF”)  
The ICF interprets the MCA from the perspective of the subject or enrollee and must be written at a language level which is understandable by the patient.  It outlines the reason for the study, what is involved, risks, benefits and costs, including items to be provided free of charge and the patient’s rights.  Services identified as paid by the sponsor, paid by Medicare, or provided free of charge, must be outlined and congruent with the MCA, CTA, protocol and billing determination.

d. Billing Determination (“Billing Grid”)  
The billing grid is used to outline all items and services provided to research subjects per the protocol schedule of events. Each service or item is identified as:

  • Routine (billable to Medicare);
  • Research-related (billable to the sponsor);
  • Routine sponsor agreed services per the clinical trial agreement (billable to the sponsor); or
  • Free of charge as outlined in the informed consent. 

This document must be congruent with the MCA, CTA, protocol and informed consent, and is essential for coordination of information for the purposes of budgeting, billing and auditing.

II. Clinical Trial Billing Indicators

The Medicare Processing Manual, Chapter 32, Section 69.2, effective for dates of service on or after January 1, 2014, states it is mandatory to report the National Clinical Trial (“NCT”) on claims for items/services provided as part of a qualifying clinical trial.  Additionally, Section 69.6 lists the billing requirements for routine costs as follows:

a. Outpatient Claims   Outpatient facility and professional claims require the NCT number, ICD-10 diagnosis code Z00.6, appending modifier Q1 to a routine service, and actual investigational item/service with modifier Q0.Facility claims also require use of Condition Code 30.

b. Inpatient Claims 
Inpatient facility claims related to a clinical trial require the NCT number, ICD-10 diagnosis code Z00.6, and Condition Code 30 regardless of whether all services are related to the clinical trial. 

III. Clinical Trial Services Furnished to Managed Care Enrollees

Traditional Medicare reimburses clinical trial services furnished for Medicare Managed Care enrollees, however, if covered outpatient services are unrelated to the clinical trial during the same date of service, the provider must split-bill the unrelated services to the Medicare Managed Care plan and the clinical trial component to Medicare fee-for-service.Additionally, per the Medicare Managed Care Manual, Chapter 8, Section 40.4.4, Category B Investigational Device Exemption (“IDE”) Trials, services for Medicare Managed Care enrollees are not paid on a fee-for-service basis and must be billed to the enrollee’s plan.
In addition to facility costs, it is important for facilities to adhere to the same guidance for all professional fees that are billed under the Health System.

In summary, the intensity and frequency of services rendered, combined with regulatory documentation requirements, multiple software platforms, and split billing requirements result in a voluminous amount of information being generated for each patient enrolled in a clinical trial.  Developing comprehensive protocols and policies, consistent clinical trial documentation processes and effective communication between the clinical trial and billing departments, will safeguard the risks inherent in your clinical trial revenue cycle process.

SunStone offers services specifically geared to help hospitals and health systems evaluate their clinical trial billing effectiveness and compliance.  If you have any questions, please contact Vonda Moon, Principal at, Kristie Bailey, Senior Manager at or Danielle Wyld, Manager at