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Clinical Trial Budgets: Current Trends & Questions Answered – Part 2

In today’s challenging drug development landscape, clinical research sites often struggle with the completeness of budgets. Needs include covering costs, reinvesting in the assets needed to optimize research – such as technology – and responding promptly. In this two-part blog, Part I explored current industry trends, then delved into questions around best practices for improving the process. Part II answers questions regarding sponsor/CRO roles, fair market value, and technology use. We also address budgetary considerations for diversity, equity, and inclusion.

1. How can sponsors and CROs help sites expedite the budgeting process?

Sites may need to negotiate with a sponsor who says specific items are part of the cost of doing business. Sponsors use this approach to decrease the site’s overall budget – especially administrative and institutional fees. Yes, there is a cost to doing business, but your responsibility is to understand your hard lines and any possibilities for compromise.

Next, let’s consider the cost of archiving records for longer periods, even 25 years. Sites are shifting from a flat fee to a yearly fee for archiving. If your site currently uses flat fees, you might reevaluate that approach.

What about sponsors paying for startup time and effort if they pull out of a study? When a sponsor decides in the middle of negotiation not to move forward, ask them to partially reimburse startup costs – namely for scientific review – as you have invested time with the good intention of executing that trial.

Is there an industry standard for billing screen failures? First, ask the sponsor to pay for the procedures performed at a screen failure visit. Alternately, reduce any ratios in the payment terms, stipulation, or prorated screen failure rates to ensure that the site is compensated. The next course of action is to apply a flat rate to screening visits.

Appropriate use criteria (AUC) relate to this year’s laws that sites must have a citation for required imaging timepoints and supporting documentation to bill certain scans to Medicare. How does AUC impact site budgets and negotiations? Sites must consult AUC before ordering advanced diagnostic imaging, leading to discrepancies in what the sponsor sees as a standard of care vs. what the site is comfortable billing. Sponsors may push back against imaging timepoints being considered research because of AUC. Explain the Medicare rule to the sponsor and emphasize that the site is at risk for billing compliance violations – not the sponsor

2. How does fair market value impact budgets?

Basically, fair market value (FMV) is the selling price agreed upon by a buyer and seller. Sponsors use FMV during negotiations to standardize the range of costs and avoid federal anti-kickback statutes, which prohibit giving certain sites discounts over others. It also applies to sites not giving discounts to certain sponsors over others in terms of covering their costs. Each institution should document its FMV policies for negotiation.

How does inflation impact FMV rates? Recently, we have seen sponsors strictly follow FMV policies during negotiations due to inflation and the need to control costs. This situation causes delays as both sides attempt to negotiate the best possible budget for their needs.

What are tactics to cover site costs, even if they aren’t aligned with the sponsor’s FMV determination? First, have a clear process for determining your costs – whether you use a percentage of Medicare rates or a research fee schedule. Note that research fee schedules are costs already reduced from retail rates, so if a research fee schedule is used, sites can’t accept less than those rates without operating at a loss to participate. To ensure these bottom-line site costs are covered, have them documented – including standard administrative fees and CPT-coded items from the research fee schedule. The more detailed and transparent the documentation is, the more likely the sponsor will cover those costs, even if they are outside the sponsor’s determined FMV costs.

3. How are growing trends such as clinical trial technology and diversity, equity, and inclusion impacting clinical trial budgets?

There is an industry trend toward using third-party vendors for budgeting and negotiation services. For example, WCG can help solidify processes for determining internal costs at your site – outlining fee documentation and justification. We offer weekly calls to discuss all projects in our queue and address any compliance questions as part of an effective strategy to launch and conduct studies more efficiently.

Real-World Perspective

Tzipora Kuba, PhD, CCRP, is manager of research finance for Hackensack Meridian Health. She shares her experience using WCG as a third-party provider for budgeting and negotiation services.

“Ours is a very busy oncology practice with multiple divisions. Working with WCG provides a fantastic relationship. We can easily submit studies, undergo Medicare coverage analysis, address budget negotiations, and then perform calendar building in our CTMS.

“WCG helps us stay on top of studies. We receive about ten new studies per week; with that volume, we could not keep up by training homegrown resources. Weekly calls help us review any delays or problems, with quick communication regarding issues to be escalated or input from investigators. We couldn’t do what we do without WCG.”

Using a clinical trial management system(CTMS) helps with billing, invoicing, and tracking the status of all patients across every single investigator and every single study. It keeps track of status, revenue, costs, and invoice reconciliation. Without a CTMS, sites may leave money on the table in terms of invoicing sponsors. How can sites cover costs for these types of technologies? We see sites including CTMS setup and maintenance fees in their budgets as separate line items to capture the time associated with utilizing these technologies.

Next, we can consider the feasibility process for sites. Once there is an interest, and you have reviewed the protocol, determine whether you have competing studies. Also, do you have the patient population available? What about resources in terms of pharmacy, storage, and equipment? After thorough vetting, you can be positioned to proceed into Medicare coverage analysis and budget negotiation.

Sites ask about capturing the costs of diversity, equity, and inclusion (DE&I) initiatives across their clinical trials. You can request recruitment and advertising services from the sponsor to ensure diversity in patient populations. Then, overhead can capture the effort of increasing diversity and inclusion. Remember to address translation costs, often included as part of IRB fees.

Finally, let’s pinpoint what sites miss most often on invoicing. How can you stay on top of this process for all your clinical trials? Leveraging CTMS technology helps, but items such as dry ice fees can slip through the cracks if you order in bulk and not per study. You may miss invoicing of investigational new drug (IND) safety reports if they are not entered into the CTMS. Also, tracking the cost of re-consenting for amendments can be a challenge for study teams. Another area to watch is invoicing for imaging procedures. Often, budgets do not include imaging performed as part of a per-patient, per-visit fee, so these costs must be invoiced separately.

Today’s drug development landscape presents budgetary and negotiation challenges for clinical research sites, and WCG is pleased to help answer your questions. Click here if you missed Part I in this series – exploring current industry trends, then delving into best practices to help you fine-tune the budgeting process.

Do you need help handling clinical trial budgeting and negotiation? Connect with WCG today.

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