Sponsored Program Compliance
Steps in Budget Preparation
Only one source of payment can be assigned to a cost (i.e. double reimbursement is not allowed). It is important to identify all potential costs and then assign those costs to a payer.
Best practice is to read the narrative of the clinical trial protocol regarding each of the tasks to be performed on enrolled participants.
A prospective reimbursement analysis (PRA) should be performed to identify all tasks within a clinical trial and to whom they are billable. A PRA is not needed if there is not a potential for a procedure, item or test to be billed to a third party (e.g., studies that involve only questionnaires, observational studies, et cetera).
PRA completion is a two-step process. The first step is to determine if the clinical trial is a “qualifying trial”, as defined in the National Coverage Determination (NCD). The NCD is issued by the Center for Medicare and Medicaid services to allow Medicare to cover the costs of qualifying clinical trials, as well as reasonable and necessary items and services used to diagnose and treat complications arising from participation in a clinical trial.
If the four conditions of a qualifying trial are satisfied, the second step is to determine what costs can, or cannot, be charged to insurance.
The PRA should be documented, including references to sources supporting the current position of medical knowledge being used in the determination of what is standard of care. Because of the importance of professional medical judgment, the Principal Investigator should formally approve the PRA.
Costs of Procedures, Items and Tests
The tasks ultimately determined to be billed to the sponsor, based on the PRA, must be valued. For hospital-based services, obtain the published charge master amount for each procedure. For federally sponsored clinical trials, discount the charge master amount using the appropriate rate from the most recent agreement between HHS and Strong Memorial Hospital. For industry sponsored trials, apply the factor to the charge master amount as stated in the Clinical Research Standard Operating Procedures.
If there is a professional fee component, obtain the fee amount from the professional fee schedule. For federally sponsored trials, use the Medicare reimbursement rate. For industry sponsored trials, apply the factor to the charge master amount as stated in the Clinical Research Standard Operating Procedures document on the SharePoint Site.
Costs of Clinical Trial Team Members
There will be effort of clinical trial team members beyond what is related to procedures, items and tests. Examples of such effort include time to complete case report forms and to resolve monitor queries. Clinical trial team members are to supply estimates of the time to complete such tasks in the protocol.
Clinical trial team members also should supply estimates of the time to complete activities not associated with any specific participant, such as visits by the sponsor, recruitment of participants, training of clinical trial team members and attendance at monitoring visits.
These estimates are valued using calculated estimates of hourly rates of pay (inclusive of fringe benefits).
Other Costs
There are other costs that are fixed and those that are somewhat variable (i.e. influenced by enrollment yet not directly tied to any particular patient). These costs must also be budgeted. Examples include advertising, pharmacy review costs and institutional review board fees.
Obtain quotes for these costs from internal and external sources, as appropriate, and maintain documentation of all cost estimates.
If the sponsor is the federal government, the current negotiated indirect cost rate must be used. For a corporate sponsored clinical trial, the indirect cost rate of 30% must be used.
Costs of procedures and compensation levels of employees are reasonably expected to increase each year, thus an inflation factor should be applied to the budgeted costs. Identification of an appropriate factor depends on expected timing of enrollment and whether costs are concentrated to particular periods in the life of the trial (e.g. first six months).
If a budget indicates there is to be a large surplus, obtain an understanding of the source of the surplus. Ensure it is not the result of a discrepancy between what the sponsor indicates it will pay for and what the UR expects it will pay for.
If a budget indicates there is to be a deficit, ensure the deficit is not the result of a misunderstanding of procedures to be performed. If the deficit is otherwise explainable, acceptance would be contrary to the goal for a trial to be self-sustaining. There might be extenuating circumstances why the trial should be accepted (for example, the ability to access the latest technology to best serve a particular patient base and the ability to collaborate with prestigious peers that is not otherwise possible).
Depending on the characteristics of the budgeted deficit or surplus, Dean’s Office approval might be necessary.
At times a final agreement might not be executed despite lengthy contract discussions. When this occurs, the would-be sponsor can be requested to reimburse the UR for the costs incurred throughout the negotiation process.
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