A study budget is designed to reimburse a research site for all costs associated to conduct the clinical trial. Sponsors will either propose a budget or request the site to develop and submit the budget. An adequate budget accurately assesses a research site’s financial needs for conducting a clinical study. It is very important to ensure that the budget amount agreed upon will adequately cover all costs and efforts associated with conducting the study.
Since each study protocol is unique, assessing and calculating the costs for each protocol requires a comprehensive understanding of the financial aspects of patient care. In addition, an understanding of the College and its relationship with its affiliated hospitals (e.g. Hahnemann University Hospital, St. Christopher’s Hospital for Children, Friends Hospital) is key in determining a budget.
The CRG has designated an analyst to negotiate and manage study budgets for each clinical department. Principal investigators, study coordinators or other research staff should not assess and negotiate study budgets. After a preliminary review of the study, the analyst will then work with the research team to conduct a thorough review of the study together.
A study budget is always attached to the clinical trial agreement (CTA). While the attached budget sets forth the agreed amount of compensation, the CTA lays out the timing, manner and conditions of such payments. The budget analyst also negotiates these terms to meet College standards and requirements.
Another purpose of assessing the budget is to comply with CMS regulations that prohibit double billing of services (e.g. seeking reimbursement from Medicare for a non-standard of care service that is already paid by sponsor). The budget analyst will take steps to ensure that each procedure/activity required in the protocol is identified as either a research service or standard of care.
Below is a general outline of the steps to assess and negotiate a budget.
Assessing the Budget
1. Determining Standard of Care (SOC) – Labeling the Study Schematic
One of the first steps to assessing the budget is to determine whether each study procedure is part of the subject’s standard of care or whether it is a research procedure. Standard of care procedures are performed as part of the subject’s normal medical care and would occur even if the subject did not participate in the study. Research procedures are procedures that are performed in connection with the subject participating in the study.
The principal investigator will review the study schematic contained in the protocol. The study schematic is a table summarizing each subject visit required under the protocol and identifies the procedures to be performed during each visit. The principal investigator will then mark each standard of care procedure and sign the labeled schematic. The schematic is then forwarded to the budget analyst or designated personnel.
2. Determining the Cost for Research Services
Using the signed schematic and discussions with the principal investigator and study coordinator, the budget analyst determines who will be performing each service required by the protocol and the amount for such procedure. For any procedures or services conducted by the hospital, the budget analyst must obtain such pricing from hospital departments/representatives. This includes, but is not limited to, the following services: pharmacy services, lab and pathology services, radiology services, cardiology services, bed fees, and other technical/professional costs.
3. Medical Device
The financial analyst should be notified if a medical device is to be used in part of the study. Additional information or documents pertaining to the device should be provided to the financial analyst.
4. Evaluating Time and Effort in Conducting the Clinical Trial
Most clinical research requires efforts that are often overlooked. The budget analyst will work with the principal investigator, study coordinator, and other research staff to identify and assess their effort by estimating the time necessary to conduct each clinical as well as administrative task.
The following are examples of common research/clinical tasks:
- Recruiting and advertising
- Screening
- Review of records
- Consenting patients
- Explaining or giving directions to a subject
- Answering questions by subject
- All procedures required by the protocol
- Taking a subject’s history
- Concomitant medications
- Conducting physical examinations
- Explaining the activities of the protocol
- Setting up and dispensing study drug
The following are examples of tasks that are administrative tasks:
- Maintaining research records
- Completing case report forms or other forms required in the protocol
- Communicating with the sponsor via telephone or in person during monitor visits
- Sending documents or records via e-mail, fax, or mail
- Answering queries
- Preparing IRB renewals and amendments
- Reviewing adverse event reports provided by sponsor
- Adverse events reporting
5. Other Fees Associated with Research
Besides being compensated for conducting research procedures, the College must also recoup for other activities associated with conducting the study. Below is a list of such activities and fees.
a. Facilities & Administrative (F&A) Costs
Under Drexel University College of Medicine policy, all privately funded sponsored or supported clinical research is subject to a standard Facilities & Administrative (F&A) cost rate (i.e., indirect cost rate, overhead, etc.). This rate is currently 30.0%. F&A costs cannot be waived. The College cannot assume the cost of performing research for a for-profit corporation. This would be inconsistent with its status as a non-profit, educational institution.
The F&A rate applies to all fees (except the IRB fee). This includes Administrative Study Start-Up Fees and all invoiced costs such as MRI's, EKG's, advertising, etc. For example, if a sponsor reimburses $100.00 for an EKG required by the protocol, $76.92 will be available to pay the cost of the EKG (i.e., divide $100.00 by 1.30). The $76.92 takes into consideration the $23.08 F&A cost.
b. Administrative Study Start-up Fee
The Administrative Study Start-Up Fee is a one-time, nonrefundable fee to be paid within thirty (30) days of either execution of the CTA or upon receipt of the first invoice. The amount of this fee will vary depending upon the type of trial. The administrative start-up fee covers a combination of costs including, but not limited to, protocol review, IRB presentation, site selection visit, initiation visit, IRB application preparation and submission, chart review, database review, study-specific training, contract negotiation time, budget negotiation time, regulatory review, informed consent form review and preparation, etc.
c. Internal Review Board (IRB) Fee
Under Drexel University College of Medicine policy, all industry-sponsored clinical trials must be submitted to WIRB. WIRB’s fees cover the initial application, amendments, renewals, SAE reporting, etc. The WIRB fees are not subject to F&A costs. To simplify the payment process and avoid financial late charges, WIRB will directly invoice a sponsor for all fees.
Note: It is important to note that when submitting the study protocol for WIRB review, check the box that directs WIRB to directly invoice the sponsor.
d. Storage Fees
It is the policy of Drexel University College of Medicine for sponsors to pay for storage fees. This fee is a one-time, nonrefundable fee paid within thirty (30) days of either the close-out visit or upon receipt of an invoice. The amount of this fee will vary depending upon the type of trial. However, the standard minimum fee is $500.00.
e. Hospital Pharmacy Fee
In some studies, the hospital’s pharmacy must be used for the storage and dispensing of the investigational drugs. The hospital pharmacy fees vary depending upon the nature of the clinical trial. The pharmacy fees must be obtained by providing the hospital pharmacist a copy of the most up-to-date protocol. The hospital pharmacist will then provide a pharmacy budget including a one-time set up/termination fee, per-patient fees and a maintenance fee.
6. Confirming the Budget
Once the above fees are assessed, the budget analyst adjusts the provided budget or prepares new budget documentation that summarizes all research fees. The budget and associated terms is provided to the principal investigator and study coordinator for review and confirmation.
Negotiating the Budget
Once confirmed, the budget analyst then initiates negotiations with the sponsor. During the negotiations, the budget analyst works with the principal investigator, study coordinator, and hospital staff to ensure that the negotiated budget covers all costs and effort for the study.
Once the budget is finalized, the budget analyst notifies the contract negotiator who will incorporate the final budget into the finalized CTA. The CTA is then signed by authorized representatives of the sponsor and the College.
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The CRG budget team also provides other services for clinical research conducted at the College. Below is a summary of those budget services.
Tenet Services and Facilities Utilization Approval Process
The Clinical Research Group is the intermediary for all research matters between the College of Medicine and Tenet Hahnemann Hospital. All research studies utilizing Hahnemann Hospital facilities or services must be reviewed by CRG and processed for Tenet’s approval initiation of the study. The financial analyst’s role is to contact the personnel listed in the IRB packet submitted to Office of Research Compliance and Administration and provide the following information in a packet to Tenet:
- Summary of specific Hahnemann facilities
- List of services conducted along with research prices (if applicable)
- Identified payee for research services listed
- Tenet questionnaire related to billing and standard of care information.
- Additional documentation (pharmacy estimate, pricing sheet, signed schematic, etc)
Maintaining the Budget
In 2009-2010, the CRG will be updating its budget management program. Budget analysts will meet with study coordinators (and other department administrators, if opted) on a monthly basis to:
- Obtain data on patient recruitment for all active studies
- Discuss any changes in studies that require an amendment to the budget
- Discuss any outstanding sponsors fees/payments
- Discuss any other issues affecting budgets
- Close out budgets for studies that are completed or terminated
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