Ask the Expert: Ease Budget Negotiations with Five-Step Preparation Process
This monthly feature presents questions from clinical trial professionals with answers from WCG Clinical’s expert staff. This issue features advice from Liz Christianson, client engagement manager for WCG PFS Clinical.
Question: How should our site prepare for an upcoming budget negotiation?
Answer: Budget negotiations can become complex if a site doesn’t come fully equipped. To expedite the process, every site negotiator should have a plan in place prior to sending the first communication to their negotiation counterpart.
Before sending out the first email to your negotiation counterpart, it’s important to personally prepare from a technical perspective, according to Liz Christianson, client engagement manager for WCG PFS Clinical. Christianson recommends following five important preliminary steps.
Step 1 – Organize an “all hands on deck” feasibility meeting. The goal of this meeting is to consult with all the applicable departments and vendors to understand their operational and budgetary needs prior to building a budget or beginning negotiations.
Prior to this meeting, make sure you have all the current ancillary/vendor fee schedules saved somewhere handy. Reviewing these prior to the meeting will afford you a good estimate of what each department is going to need to be successful on a study.
Additionally, having a comprehensive, study-specific feasibility meeting is going to prevent big-ticket expenses and/or operational logistics from being missed. Having foresight can help prevent wasted time and money, Christianson says.
During this meeting, you should not only discuss what supplies will be needed, but you should also discuss scheduling. “You might find it beneficial to role-play a patient moving through the study from start to finish to understand what that will look like for all parties involved,” she says.
Step 2 – Complete an internal budget that is site-specific. “When working with a new hospital client on budgeting processes,” she says, “we often get asked, ‘Why would I spend time building an internal budget when the sponsor has already provided us with a template?’” First off, it shouldn’t take very long. If you’re preparing a coverage analysis, which you should be, it can be as easy as copying and pasting that grid into a new tab and then refining with budgeting data.
“You should not rely on the sponsor’s budget template or protocol Schedule of Events to recognize all billable items and site expenses,” Christianson cautions. Generally, less than 50 percent of potentially billable items are actually identified in the sponsor budget. Building an internal budget will give you the details you need to formulate valid negotiation arguments for your costs and for any additions or deletions in the sponsor budget template.
Step 3 – Use predeveloped, standard research pricing; for instance, a percentage of Medicare rates or percentage of Chargemaster rates. And be consistent with your requests — do not change pricing from study to study, Christianson stresses. Changing your process too frequently will trigger questions from sponsors, cause significant delays in negotiations and may make your site appear difficult to work with.
Step 4 – Invest time prior to engaging in study-specific work to develop a standard administrative fee schedule with justifications included on institutional letterhead. Sponsors/CROs increasingly are requiring this kind of information. Sending the documentation right away instead of waiting for the request is going to reduce your negotiation time significantly. Documentation may also allow the CRO to approve certain fees without escalating the issue to the sponsor. In addition, developing this schedule preemptively, and keeping it on hand, will save time by minimizing the questions you have for ancillary departments with each study.
Step 5 – Put a process in place preemptively to address any impasses, so that you don’t get stuck when that time inevitably comes. For example, perhaps the provision of full start-up fees is a sticking point for your institution. If you don’t get the full start-up you’ve requested, you know the powers that be at your institution won’t approve participation in the study, Christianson says. Document this for your negotiator so that they can flag the appropriate decisionmaker if and when this situation arises. “Knowing the sponsor won’t cover start-up will allow the site leader to quickly make the call to drop the study,” she points out.
“The biggest takeaway here is to understand that it’s your duty to adequately prepare for negotiations if you expect an agreeable and timely conclusion. Failure to do so can result in money left on the table, time wasted and/or bridges burned.”