{"id":324,"date":"2020-09-04T18:54:48","date_gmt":"2020-09-04T18:54:48","guid":{"rendered":"https:\/\/www.socra.org\/blog\/?p=324"},"modified":"2023-03-12T21:15:23","modified_gmt":"2023-03-12T21:15:23","slug":"budget-development-and-negotiation-for-investigative-sites","status":"publish","type":"post","link":"https:\/\/www.socra.org\/blog\/budget-development-and-negotiation-for-investigative-sites\/","title":{"rendered":"Budget Development and Negotiation for Investigative Sites"},"content":{"rendered":"
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\"Budget<\/figure><\/div>\n\n\n

Author<\/strong>: Anna K. Rockich, MS, Pharm D, Director, General Surgery Research Program, University of Kentucky Medical Center <\/p>\n\n\n\n

Abstract<\/strong>: Effective budget development and negotiation is critical for investigative sites. This article provides an overview of budget requirements for the conduct of a study, identifies common mistakes in developing budgets, and highlights how to effectively develop the budget and negotiate with the sponsor. Tools to assist in managing the budget on a daily basis are provided.<\/p>\n\n\n\n\n\n\n\n

Introduction<\/h2>\n\n\n\n

Study coordinators wear many\nhats, including organizing study operations, writing the institutional review\nboard (IRB) submission, maintaining ongoing IRB communications, obtaining\ninformed consent, administering investigational drugs and devices, monitoring\nstudy subjects, collecting data, and working with sponsors. Budget and billing are\ntwo of many responsibilities.<\/p>\n\n\n\n

Protocols have become increasingly complex, and sponsors are demanding more work by investigative sites. According to the Tufts Center for the Study of Drug Development1<\/sup>, in 2000, the median number of unique procedures per protocol was 20.5; by 2011, this had increased to 30.4 unique procedures per protocol. The number of unique procedures per protocol in 2016, although not yet quantified, will be exponentially higher. The total number of eligibility criteria has also increased, from 31 in 2000 to 49 in 2007, the last date for which data are available. Scrutiny on inclusion and exclusion criteria has also increased. The median number of case report form pages per-protocol has increased from 55 in 2000 to 180 in 2007.<\/p>\n\n\n\n

It takes about five years for\na study coordinator with minimal experience to become relatively autonomous, in\nthe author\u2019s opinion. Budgeting and contracting are generally the last skills\nthat study coordinators are taught. The author recently met a very experienced study\ncoordinator who has worked as a study coordinator for 15 years. She had never,\nhowever, developed a budget. Locally, at least at the University of Kentucky,\navailable curriculums for training on budgets and contracts are limited. On-the-job\ntraining requires time and good mentors. Study coordinator turnover is another\nissue. Study coordinating is a vocation not suited for all. Some people enjoy research\nwhile others do not, and they move on to other positions or disciplines. The\nauthor must continually train new study coordinators.<\/p>\n\n\n\n

Selecting the Right Studies<\/h2>\n\n\n\n

The General Surgery Research Program (GSRP) at the University of Kentucky has developed a standardized method for budget development and management as well as a strong mentoring program for study coordinators. The GSRP also developed a system of checks and balances with budget management to ensure that the front-end work complements the back-end work.<\/p>\n\n\n\n

Selecting the right studies\nis crucial (Table 1). It is a bad decision for both the investigative site and\nthe sponsor when a site accepts a study and then cannot enroll enough subjects.\nConducting a feasibility analysis enables the study coordinator to identify studies\nthat are truly good matches for the institution. It is important to critically\nreview the inclusion and exclusion criteria and not to simply ask the clinical\ninvestigator whether there are enough patients to meet the enrollment goal. A\nmulti-disciplinary team of clinicians who will be involved with the study, such\nas specialty physicians, pharmacists, nurses, respiratory therapists, and\nnutritionists, should participate in reviewing the study and help identify possible\nstumbling blocks.<\/p>\n\n\n\n

The study coordinator must also\ndetermine whether the budget is reasonable. The investigative site should not assume\na deficit balance on a clinical trial for the sponsor. It is perfectly\nacceptable to tell the sponsor that the study will not work for the site.<\/p>\n\n\n\n

Developing a Study Budget <\/strong><\/h2>\n\n\n\n

The basics of budget development for a clinical trial include reviewing the protocol, the internal budget versus the external budget, cost versus charge, and the above standard of care versus standard of care analysis (Table 2). It is important to review each section of the protocol carefully. The author compares the study assessment table (a table summarizing study required procedures typically available in the protocol) to that of the actual text of the protocol. Ninety percent of the time, the assessment schedule is either inaccurate or incomplete. The author revises the assessment schedule for accuracy and uses it in preparing the budget. It is very important to carefully review the footnotes in the assessment table that further describe study assessments. <\/p>\n\n\n\n

Whether the study is for a\ndevice, a drug, or both must be considered. The University of Kentucky General\nSurgery Research Program conducts both drug and device studies. Sometimes,\nhowever, investigative site staff may not have the necessary expertise. For\nexample, the site is conducting a study of an investigational drug given by a syringe\npump, and the nurses are not trained in the use of syringe pumps. Thus, this\nstudy involves both a drug and a device, and nurses need to be trained in using\nthe syringe pumps. The study coordinator or the investigator must understand\nthe investigator\u2019s brochure, including the adverse event profile, which provides\ninsights on adverse event monitoring that will be necessary during the study.<\/p>\n\n\n\n

The author prepares two types\nof budgets for every protocol. These budgets include the internal and external\n( or sponsor) budgets. The internal budget is a standardized worksheet for use\nin determining local costs. The budget that the sponsor sends the investigative\nsite is the external budget. The study coordinator must convert the internal\nbudget onto the external budget for the sponsor. Receiving the same sponsor budget\nformat from all investigative sites enables the sponsor to compare budgets across\nsites. Every institution is different. The study coordinator must be able to\neffectively communicate with the sponsor to make the case for the site\u2019s\nbudget.<\/p>\n\n\n\n

Another budget development\nbasic is cost versus charge. The cost, which is fixed, is the total dollars\nneeded to produce a service at the institution. A charge is the price of the\nservice to the sponsor, which may be different. Investigative sites are in\ncontrol of their charges and may be able to negotiate research discounts with\ndifferent departments within the institution. <\/p>\n\n\n\n

The \u201cabove standard of care\u201d\nversus \u201cstandard of care\u201d analysis is critical. The study coordinator and the investigator\nmust have a good understanding of the standard of care for the patient population\nin order to understand and be able to identify issues related to items in the\nprotocol that are above standard of care. It may be helpful to work with the\ninvestigator to identify literature that describes the standard of care\nnationally. The \u201cabove standard of care\u201d items are the building block of the budget.\n<\/p>\n\n\n\n

The General Surgery Research\nProgram uses a worksheet that allows the investigator to identify the \u201cabove\nstandard of care\u201d procedures versus standard of care procedures. The\ninvestigator signs and dates the worksheet. It is necessary to have this\ndocumentation of above standard of care versus standard of care for budget negotiation.\nThe General Surgery Research Program also gives the worksheet to the corporate\ncompliance group for use in Medicare analysis and approval process.<\/p>\n\n\n\n

Building the Budget <\/h2>\n\n\n\n

Key considerations in building\nthe budget include study demographics, salaries, direct hospital costs, other\ndirect costs, and pass-through costs. Study demographics frame the budget\n(Table 3). They include the phase of the study (Phase 1 to Phase 4), the number\nof subjects to be enrolled, the duration of enrollment, and the duration of the\nstudy to completed patients. If enrollment is anticipated to last two years and\nfollow-up is five years, then the duration of the study to completed subjects is\nseven years. Over those seven years, costs will increase. Staff will receive cost\nof living adjustments in their raises and hospital costs will increase every\nyear. The budget must include projected cost increases.<\/p>\n\n\n\n

After subjects have completed\nthe study, administrative work is required to close out the study. Thus, it is\nalso important to understand the duration of study close-out. Study close-out includes\nreporting to the IRB, the final monitoring visits, and closing out the\naccounts.<\/p>\n\n\n\n

Salaries are a major\ncomponent of the study budget. Workload analysis is necessary to determine the\nsalaries of the staff members who will be working on the protocol, including\nthe investigator, the study coordinator, and perhaps a study administrator or\non-call staff (Table 4).<\/p>\n\n\n\n

Workload analysis includes\nthe administrative time for each of the staff members for the entire study\nperiod, from the start of discussions with the sponsor to closing down the IRB\nand the last monitoring visit. Clinical time is estimated on a per-subject\nbasis. In order to estimate the amount of time and money per key staff member,\nall of this information is distilled down to a percentage of the full-time\nequivalent. <\/p>\n\n\n\n

The worksheet for\nadministrative time includes estimated enrollment, the expected follow-up\nperiod, and the total expected study period. The General Surgery Research\nProgram estimates the amount of time needed to complete specific administrative\ntasks such as budget management in half-hour increments. The estimate is done\nin hours per week multiplied by the number of weeks in the total expected study\nperiod. <\/p>\n\n\n\n

Clinical time generally covers the investigator and the study coordinator, and for studies in the General Surgery Research Program, the on-call staff. The worksheet is used to estimate the amount of time needed, in half-hour increments, per subject, for each visit, and for each test\/procedure. The totals are calculated for the total expected study period. The author works primarily on studies in General Surgery. Thus, subjects are enrolled 24\/7, usually on weekends and evenings. These studies require an infrastructure where nurses are available 24\/7, so on-call staff must be included in the budget.<\/p>\n\n\n\n

Estimating labor time further\nrequires understanding the true costs, which include salaries, benefits, total\nworkplace days (total days minus vacation, sick, holiday, etc.), and non-study\nspecific time. For example, if a staff member makes $50,000 plus benefits,\ntotaling $16,500, the total salary is $66,500. The estimated time for administrative\nand clinical time is 832 project hours. If there are 1,760 work hours (estimate\nwork hours to account for sick time, vacation, administrative non-study-related\ntime) per year, then 40% of work effort, at $31,255, will be directed toward\nthis particular study. <\/p>\n\n\n\n

Table 5 outlines direct\nhospital costs, other direct costs, and pass-through costs. Direct hospital costs\ninclude laboratory charges and procedure costs. Carefully review laboratory groupings\nin the protocol. Every hospital has a standard battery of tests for every panel.\nDetermine what the protocol requires in addition to those standard tests.<\/p>\n\n\n\n

Procedure costs include technical\nand medical costs. For a CT scan, for example, there is a technical cost for performing\nthe CT scan and the supplies used as well as a fee for the radiologist to read\nthe scan. It is very important to sit down with representatives of other\ndepartments to discuss procedure costs and ask them to identify the exact CPT\ncode or CDM code that is necessary. Other direct costs include subject stipends\nfor travel, supplies, equipment, employee travel, ancillary units, clinical\nunits, clinical space, and other departmental services such as the pharmacy,\nnursing, and respiratory therapy.<\/p>\n\n\n\n

Protocols also have hidden costs. For example, the protocol may require the radiology technician to take more views than what is considered for a standard CT scan of the abdomen. It is very important to read the superscript descriptions of assessments and to look for bundled costs. The General Surgery Research Program is conducting a study in the ICU population that requires a Sequential Organ Failure Assessment (SOFA). This is listed on the screening baseline visit all the way up to day 30. Performing a SOFA assessment requires evaluating renal, cardiovascular, coagulation, hepatic, neurological, and respiratory function. In order to budget costs accurately, investigative site staff needs to know that doing this also requires tests such as creatinine, bilirubin, platelet count, and blood gas analysis. <\/p>\n\n\n\n

The duration of the protocol,\nuse of a drug or device in other ongoing studies, and case report forms are factors\nthat can add other hidden costs. Estimated annual cost increases based on the duration\nof the protocol must be incorporated into the budget. If the drug or device is\nbeing used in other ongoing studies, the investigative site could be inundated\nwith investigational new drug application safety reports from those studies. The\ntime required to complete case report forms must also be considered. <\/p>\n\n\n\n

Pass-through costs represent\ncosts that are not directly related to the per-subject costs. They are listed\nin a different section of the budget and passed directly to the sponsor. Pass-through\ncosts include administrative start-up costs, the IRB start-up work, and\ncontract and budget development. The University of Kentucky has a group that\nmanages study budgets from a billing perspective, for a fee. The General\nSurgery Research Program passes this fee on to the sponsor. Other pass-through\ncosts include pharmacy start-up fees, IRB review and close-out fees, and long-term\nstorage and archiving.<\/p>\n\n\n\n

Complicated laboratory tests\nand unanticipated laboratory tests are pass-through costs. The General Surgery\nResearch Program conducts many studies requiring microbiology testing, which\ncan be complicated. If the subject has a positive blood culture result in the\nbeginning of the study, this test may need to be repeated. The blood culture test\nitself is complicated, as well as expensive. The General Surgery Research\nProgram lists microbiology tests in the budget and passes through the costs. Depending\non the drug or device being studied, unanticipated laboratory tests may be\nnecessary due to a particular unanticipated side effect. Sometimes the sponsor will\nlist a battery of required tests in the protocol if the side effect occurs.\nThis should be part of the unanticipated laboratory tests section of the\nbudget.<\/p>\n\n\n\n

Contract and protocol\namendments are another pass-through cost. Investigative site staff must spend\ntime on contract and protocol amendments. The General Surgery Research Program\nbills the sponsor for each amendment.<\/p>\n\n\n\n

Screen failures, serious\nadverse event (SAE) reports, investigational new drug application safety\nreports, and advertising are all pass-through costs. In order to have staff available\n24\/7, the General Surgery Research Program has quarterly on-call fees for\npagers that are passed on to the sponsor. Outside services such as home\nhealthcare are also pass-through costs.<\/p>\n\n\n\n

Learning from Past Mistakes<\/h2>\n\n\n\n

Mistakes made by the author\nprovide learning experiences for others. Allowing a non-enrolling study to\ncontinue was one mistake. Build a mechanism to evaluate enrollment on a\nquarterly basis. Sometimes, the investigative site can negotiate with the sponsor\nto identify and fix an enrollment problem. For example, the General Surgery\nResearch Program negotiated with a sponsor to modify the inclusion\/exclusion\ncriteria for a study. In other cases, however, the site does not have the\nappropriate patient population, and enrollment cannot be increased to the\nnecessary level.<\/p>\n\n\n\n

Not addressing poor cash flow from a sponsor was another mistake by the author. The General Surgery Research Program was accumulating accounts receivable in a particular account with a very small device company. The device company went out of business and left the investigative site with a deficit. Other mistakes were underestimating screening time and training time as well as failure to address changes in the cost due to protocol amendments. Investigative site staff must consider whether a protocol amendment affects the budget and if it does, to address the budget change.<\/p>\n\n\n\n

Investigative site staff\nmembers should not fear re-addressing costs with sponsors. The author\u2019s\nexperience in doing this has been very positive. If the site has a justifiable\ncost, sponsors are generally willing to work with the site. Sponsors want their\nsites to be successful and happy. If a site is partway through the study and\nstaff members realize that they have underestimated the costs, they should\ndiscuss this with the sponsor.<\/p>\n\n\n\n

Negotiating Budgets and Payments Terms  <\/h2>\n\n\n\n

Investigative sites give the\nsponsor a sponsor budget containing the site\u2019s costs. Budgets of the General\nSurgery Research Program (GSRP) are generally higher than other sites because the\nGeneral Surgery Research Program (GSRP) has a strong understanding of its costs,\nespecially personnel costs. Site staff members should send a cost justification\nletter with the budget to explain the costs and to facilitate communication\nwith the sponsor. The site should negotiate research discounts with various\ndepartments within the institution as a way to reduce costs for the sponsor if possible.<\/p>\n\n\n\n

There are some basic rules to\nkeep in mind about the budget in general. Timely payment is important. The\nGeneral Surgery Research Program reviews budgets and bills quarterly. It is\nimportant to ensure that the investigative site receives regular payments from the\nsponsor. If it does not, this must be addressed. The site should charge the\nsponsor non-refundable start-up fees. Having a residual balance at the end of\nthe study is the goal; however, there may be times when the study is very\nimportant to the investigator and there is no residual balance other than the\nneeds to cover some study costs.<\/p>\n\n\n\n

Once the budget and contract\nhave been negotiated and the study is initiated, budget management is necessary.\nBudget management allows efficient management of study subject billing, and it provides\nprotection against erroneous billing to third-party insurers and subjects,\nwhich could result in legal action. The Office of the Inspector General\nconsiders clinical research a top compliance initiative and is spending a great\ndeal of money on fraud and abuse audits. Medicare \u201cdouble-billing\u201d has been the\nsubject of many investigations and settlements by the Office of the Inspector\nGeneral and the Department of Justice. Budget management creates a mechanism\nfor communication between the study coordinator and the billing staff members,\nand it provides a process for critical analysis of the research program for\nfinancial progress.<\/p>\n\n\n\n

Budget Management Tools <\/h2>\n\n\n\n

Budget management tools include:<\/h3>\n\n\n\n