By Kathi Shah, MS, MBA
Creating a clinical trial site budget sounds simple right? A Sponsor contracts with an investigative site to conduct a clinical trial per the protocol. The Investigative site is compensated by the Sponsor to conduct the services outlined in the protocol. The relationship between the Sponsor and Investigative site is heavily weighted on the budget developed to compensate sites for their efforts to conduct the study.
It’s clear that a Sponsor wants to conduct clinical trials in the most cost efficient manner, and similarly institutions providing the expertise and conducting the trial want to ensure that they remain profitable. A growing number of regulations aimed at enhancing patient safety, increasing the transparency of financial relationships and preventing potential conflicts of interest between Sponsor companies and Investigative sites have put the process of developing a per participant site grant under great scrutiny. Services must be reimbursed at what the Department of Human Health Services (HHS) and Office of Inspector General (OIG) call fair market value (FMV). Sponsors can face criminal and financial penalties if they fail to comply with these regulations. So what is FMV and who defines it? The OIG provided guidelines in 2003 stating that payments must be “legitimate, reasonable and necessary.” Clear as mud?
Due to the lack of clarity in the regulations, budget negotiations are often stalling the process of study start-up and can even destroy strong relationships between the Sponsor and site, forcing one party to walk away from negotiations.
The components of a clinical budget typically include the cost of the visit (whatever is not covered by Medicare or other payers), site administration, coordinator or nurse time, Case Report Form completion, or other documentation. In some cases, a clinical trial is conducted on healthy individuals (subjects) such that the cost of the visit would not be reimbursed by insurance. In those cases, procedures, in addition to time and effort, must be fairly compensated for.
So, with a myriad of opinions about what constitutes FMV, how does a Sponsor create a budget that treats both themselves and Investigative sites with fairness?
- Do your homework. There are several, widely-used, benchmarking tools and websites available to help Sponsors determine the appropriate cost of trial procedures (e.g. ICD9 codes) and even salary information for the members conducting the trial (e.g salary.com); use them if they are available to you. However, it is important to recognize that there is a difference between benchmarking and FMV. These tools tend to focus on the cost of procedures versus the associated support costs, which typically create a lack of agreement during budget negotiations. However they are necessary for aligning on procedure costs at a minimum. Sponsors should avoid relying solely on internal historical data based on previous studies as they may get stuck; independent external data supports a “lock-tight” budget.
- Create a budget in a clear and concise format and clearly document your rationale. Have you ever had someone “challenge” the numbers that you provide? Clearly document the values that you are presenting to the site and be prepared to provide the justification for how you attained them. For example, a site visit entails the Informed Consent, Medical History and Demographics, and several procedures (e.g. ECG, vitals, etc). Typically, procedural costs can be easily determined, but the time and effort required to gather patient consent, medical history or demographics can be based on time and effort. Establish an estimated time to conduct these activities and research the relevant salaries in the region for physicians, nurses, and coordinators. Be sure you can demonstrate the diligence used when creating the budget; track your sources and create templates that can be used for later reference.
- Document your negotiations. Throughout the negotiation process, it is critical to retain all documentation related to the justification of costs. For example, a clinical site may need to add overhead to the per-patient fees. Obtain justification for the overhead. Many sites have an overhead policy and will provide this to you on official letterhead.
- Build the relationship. Always keep in mind that as a Sponsor, you will be depending on the site to conduct the trial in a way that helps you meet the study objectives. While cost effectiveness is a primary goal, remember the saying “you get what you pay for.” Be willing and prepared to walk away from a site when you cannot reach agreement in accordance with the standards you have put in place. And don’t forget that there is growing scrutiny on these types of grants.
Taking these steps while developing a clinical site budget can help you avoid scrutiny by regulatory agencies. Four steps simplify the complexities of creating the per-participant grant fees, but do not underestimate the time and effort required to remain in compliance with the regulations, especially in an environment where the regulations are extremely vague. However, by doing your homework, creating a clear, rationalized budget, documenting negotiations, and building the relationship, you will be able to save time and stay on budget in the process!
The opinions expressed in this blog post are the author’s only and do not necessarily reflect those of MassDevice.com or its employees.
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