The conversation around participant payments in clinical trials has long been clouded by confusion and inconsistency. Are payments allowed by IRBs? How should they be structured? Are they taxed? And why is taxation relevant?

As the industry moves toward addressing barriers for participation in clinical trials, addressing these financial questions is critical. IRBs themselves have expressed a view aligned with the HHS, stating that while excessive payments raise the risk of coercion, ethical payments are not only accepted, but also encouraged. This blog post on the ethics of clinical trial payments offers a deeper dive into how to approach compensation responsibly. But misclassifying payments or failing to account for participant burden can lead to financial strain, inequitable access, and unintended consequences—such as disqualifying low-income participants from government benefits due to taxable stipends (which is not only inequitable, but also jeopardizes research quality by hindering the diversity of patient populations).

To ensure fair and transparent compensation, we need a standardized approach that balances ethical considerations, financial realities, and regulatory compliance. Mural Health has taken on this challenge, developing a structured participant payment model that aims to remove financial barriers while aligning with regulatory guidelines. This participant payment model categorizes payments appropriately and ensures that reimbursements, prepayments, and stipends serve their intended purpose.

This initial model provides a US framework, and has been reviewed by WCG and Advarra, as well as tax attorneys, ensuring compliance with industry best practices.

We are sharing this approach publicly with the goal of encouraging industry-wide adoption. We believe every sponsor should consider this framework, and we are happy to provide the full policy upon request.

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Breaking Down the Different Types of Participant Payments

As a first step, sponsors, CROs and sites should have a standardized view on the different payment categories, and what each of them means. Terms like “reimbursement” and “stipend” are currently used interchangeably to describe participant payments, but they are meaningfully different in ways that impact participants directly. We have defined the main payment types below:

Direct payments (Non-Taxable)

Definition: Payments covering trial-related expenses that are paid directly by the sponsor (or an agent of the sponsor) at no out-of-pocket to participants.
Examples: Booking rideshare and/or travel directly with an airline, hotel, car service, etc. 

Reimbursements (Non-Taxable)

Definition: Payments that are made to repay a participant that has incurred a trial-related expense. These payments will be provided against documented evidence of the expense (usually in the form of a receipt, or self attestation).
Examples: Reimbursements can cover any expense that is reasonably required by an individual to participate in a trial. Some of the most common expenses include travel-related expenses, meals, lodging, or WiFi / internet required for trial activities.

Prepayments (Non-Taxable if Structured Correctly)

Definition: Funds may be provided to participants in advance of a trial related out-of-pocket expense. In order for prepayments to remain non-taxable, they must (1) be substantiated with documentary evidence that reconciles the expense against the prepayment, and (2) must be provided under the governance of a documented payments policy with a defined exception handling process, in order to eliminate tax-compliance complications that may prevent participation.
Examples: All expenses that can be reimbursed, but paid ahead of expense.

Stipends (Taxable Income)

Definition: A fixed payment that represents an amount in excess of all expenses. Stipends should be used only for specific purposes (see below), as they are meant to represent wealth-creating income. Stipends are commonly used instead of a reimbursement, because they do not need to be supported by documentary evidence (like a receipt), making them logistically easier for site-personnel to distribute. 

Stipends should be used for two reasons:

Lost Wages & Dependent Care: Payments made to participants to compensate for lost wages or other reasonable and necessary personal expenses that do not qualify as a non-taxable reimbursement (e.g. - childcare expenses). 

Incentives and Appreciation: Payments made directly to a participant in appreciation of hardships endured, or the completion of study-required activities. 

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Mural Health’s Standardized Participant Payment Model

In order to standardize a framework that can be applied to all studies, Mural Health has designed a model that prioritizes participants’ financial well-being and eliminates risk to welfare eligibility, while respecting sponsor budgetary limitations and ensuring compliance with ethical standards and tax regulations. 

The model’s core principles include:

Minimizing Out-of-Pocket Costs

• When possible, provide support to participants via direct payments to providers (e.g., travel & lodging). 
• When necessary, prepayments should be deployed in the context of a documented policy.
• Reimbursements should be provided to participants as quickly as possible to minimize financial burden.

Eliminating Threats to Welfare Benefits 

• All available budget that is available for participants should be paid, first, in the form of a non-taxable payment.
• When applicable, any available stipends should be provided on an opt-in basis, in order to avoid threats to welfare programs.

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How it Works - A Quick Guide

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What This Means for Sponsors and CROs

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We invite sponsors, regulators, and patient advocacy groups to join us in refining and expanding this approach. If you’re interested in learning more about our standardized framework or reviewing our payment policy in detail, we’re happy to discuss more upon request. Please visit the Contact Us page of our website to get in touch.