Cut Budget Negotiation Time by Setting Standard Costs in Advance, Experts Advise
With the number of days sites spend negotiating trial budgets rising by 62 percent in the past two years, experts say the best way to cut down on the process is to document standard costs, fees and coverage allowances and have those numbers at the ready when budgeting begins.
In the second quarter of 2020, the budget turnaround time (TAT) was 31.6 days on average from receipt of the sponsor’s proposal to budget finalization, says Suzanne Caruso, senior vice president of insights and analytics for WCG. Two years later, that number has risen to about 52 days at U.S. sites of all sizes, Caruso said, citing WCG Knowledge Base data.
The primary culprit is growing trial complexity. Today’s trials require more visits per participant and more procedures per visit than ever before, and all of those procedures need to be assessed during the negotiation process.
“Imagine a 20-, 25-, 30-visit study,” Caruso told attendees at a recent WCG webinar. “These are just massive endeavors in understanding the budget. There’s a tremendous amount of detail within the protocol, within the budget, that each site is negotiating.”
Going into budget talks armed with hourly rates for principal investigators, nurses and research coordinators, and time estimates for standard activities, such as informed consent and adverse event management, is paramount in today’s landscape, she said.
Hackensack Meridian Health accomplishes that goal by calculating standard hourly rates based on the salary and benefits of the people carrying out the procedures.
“We’re looking at multiple procedures that are taking place at each visit,” said Tzipora Kuba, manager of research finance for the New Jersey site network. “That’s how we’re able to determine how much time each of those procedures takes at each visit and what that would come to for that visit in terms of time and effort for each of the individuals on the study.”
Sites should be prepared to provide documentation of their rates, usually by way of PDFs signed by site finance officials, showing that a proposed amount for a given procedure is the standard rate they employ for all trials, said Allison Mongan, manager of clinical research administration for WCG. Using such documentation to develop a master fee schedule (MFS) cuts the TAT by eliminating the need to haggle over standard administration fees each time budgets are discussed.
It’s also important that the MFS account for rising prices, especially in the U.S., where inflation is hitting historically high rates. Schedules that don’t account for annual increases in prices can lock a site into years-old fees, Kuba cautioned.
Sites in general don’t do a good enough job of tackling inflation, she said. Her network’s approach is to calculate the current cost of each trial procedure, add 5 percent annually to that cost and then divide the total by the number of trial years to get a standard amount that covers inflation.
In addition to inflation, sites also should understand that new administration fees could arise in the future and make sure the MFS is worded to allow for unexpected costs, Mongan said. This is important to ensure sites aren’t held captive to a single set of fees that could change as time goes on.
Sites that base fees on Medicare coverage analyses should explain that rationale in any counter offer they make, Mongan advised, as a sponsor may have a poor grasp on Medicare policies for trial billing. Sponsors may balk at covering some procedures they think qualify as standard of care, she said, when Medicare billing rules list them as research-related.
A trial startup packet can be a great place to highlight this, advised Kuba, whose site provides sponsors with information explaining that every study they take on goes through a thorough Medicare coverage analysis to determine which costs may be billed to the federal program and which are strictly research-related costs that should be paid for by the trial’s sponsor.
It may also be worth seeking compensation for Medicare coverage analyses from sponsors, she said, as they require significant amounts of time and resources to conduct and are done specifically for research purposes.
“Many sites will name this something like ‘billing compliance fee,’” Mongan added, because Medicare billing compliance is crucial for sites to make sure they are not violating federal laws. “The sponsor should take that into consideration and be willing to reimburse sites for time and effort” spent on coverage analyses, she said.
With sponsors requiring ever-increasing numbers of procedures per visit and often low-balling their initial budget offers, sites need to make sure they agree with their sponsors on exactly what procedures will be conducted and what they would cost the site, said Mongan, who recommended sharing with the sponsor the specific Medicare procedure code used to make each cost calculation.
Finally, sites’ budget negotiations should consider the cost of using sponsor-required technology, including training and implementation, which can add even more burden on already strained staff, Kuba said and Mongan agreed. New technology costs time and resources that are not yet adequately reimbursed in many budgets. Kuba advises sites to start by looking at fees they charge for site initiation visits, which is usually where these sponsor-specific technologies are first introduced.
View the webinar recording here: https://bit.ly/3OSGylV.