Your Clinical Research Budget: Considerations in the Cardiac Catheterization Laboratory

Budget Players A sound budget is crucial to having a successful program. Let’s review some of the issues that a research manager may encounter. Several players influence the budget. These are the physician investigator, the study sponsor and the hospital. A physician investigator(s) (PI) may be too busy to be interested in budget specifics. The study sponsor is always very interested in keeping their cost down. Lastly, hospital administration is very interested in covering its cost and ensuring that researchers comply with regulations. The goal is to keep everyone happy while ensuring that the budget is realistic. The manager must first begin with the physician. The physician must be informed and involved. A prioritization of studies and a realistic assessment of patient material in each and every study should be performed. The physician must also be informed of and involved with the cost of doing particular studies. A balance must be reached between the scientific merits of all clinical research studies in the program and fiscal realities. Having gained the physician as an ally, the manager now has the leverage to negotiate with the sponsor and sometimes the hospital. The physician might be able to intercede and facilitate when budget and/or clinical trial agreement stalls. Additionally, senior hospital administration views physician involvement favorably. To them, the more involved the physician, the more accountability exists for the clinical research studies. Revenue Stream Revenue sources for clinical research vary. Grants are one source of funding. The investigator must submit a proposal and receive approval. The National Institutes of Health, other federal agencies and philanthropic organizations all award grants to investigators. However, there has been a growing shift in clinical research. Over the last decade, more and more research studies are being funded by industry. Pharmaceutical and biotech companies have cardiovascular products that they want tested for feasibility, safety and efficacy. The cath lab is a natural place for these new therapies, devices, and technology to be studied clinically. The manager will often receive the proposed per patient budget together with the Clinical Trials Agreement from the sponsor. The reimbursement rate per patient varies considerably between studies (Figure 1). This is influenced by the sponsor’s assessment of complexity of the protocol, and the type of data and follow-up requested. For the most part, it does not account for the variation in the cost of doing business in different parts of the country. Figure 1 shows that typical rates can range anywhere from $800/patient to $10,000. At first blush, one may think that the $10,000 reimbursement is very lucrative. I would caution you to read the fine print! Before you commit to a higher reimbursing study, you must look at the patient pool you can earmark for the study. The manager and the physician must also objectively estimate the cost of screening to yield (the cost of actually enrolling a patient). The physician, in the assessment, tends to be more optimistic in projecting patient material available, as well as patient enrollment. The manager’s best tool for this situation is to come to the table armed with data. Historical data, past performances from previous studies and the cath lab’s QA data are helpful objective tools. Another important question to ask is: what are the costs of the screening tests and procedures, as well as those mandated for follow-up? The manager needs to find the right balance between the patient material, reimbursement, resource utilization, and clinical research studies. Finding this balance allows the manager to meet the cost of doing research while also supporting the answering of scientific questions in the cath lab. Cost Analysis Let’s review the direct and indirect costs of clinical research (Figure 2). The direct cost is further categorized into fixed and variable cost. One of the manager’s biggest fixed costs is personnel. Variable costs are costs incurred as a result of following the protocol. These costs include patient care, tests and procedures. Patient out-of-pocket expense may also be included in this total. Indirect costs include administrative overhead, Institutional Review Board (IRB), and miscellaneous fees. Direct Costs: Fixed In clinical research, direct fixed costs are full-time equivalency (FTEs) under the title Research Coordinators/Assistants (RCAs). Staffing for a clinical research program is not as flexible as other departments. There is no float pool to fall back on when you have a staffing crisis. Personnel with the right blend of research and clinical experience are hard to come by. Traditionally, RCAs are selected because of their clinical and organizational skills. They learn to be an RCA on the job and through self-learning. Recruitment and retention can sometimes be tricky. Assigning realistic combinations of studies to an RCA will result in stable staffing patterns. The manager must take into consideration the complexity of the protocol and the number of patients projected to be enrolled, as well as the experience of the RCA when assigning a study. The activities of the RCA may vary but are pretty much summarized in Figure 3. The screening, enrollment and protocol execution are obvious to the physician investigator. However, percent effort put into the completion of Case Report Forms (CRF), coordination and scheduling of tests and procedures, data query resolution, and regulatory correspondence and upkeep remain somewhat under the radar screen. Not all CRFs are created equal. Depending on the phase or type of study, one CRF may take from a few hours to an entire day (even more in some cases) to complete. Assuring that tests and procedures are scheduled within the window specified in protocol also takes up time. Ensuring that regulatory documents are in order is definitely a test of an RCA’s organizational skills. These important documents must be readily available to anyone authorized to review study files, including federal regulatory agents. Answering data queries can also take up time. However, the volume of data queries is somewhat dependent on the quality of work put in during the initial completion of the CRFs. Ultimately, a good assessment of how much time will be utilized for a particular study will also help in cost analysis. Direct Costs: Variable Costs to conduct the study, other than personnel, can either be nominal or a huge portion of the budget, depending on the study. Careful attention must be paid in determining true cost. That $10,000 per patient reimbursement may not seem too lucrative if it is ridden with purely protocol-mandated tests and procedures. Or it may be that the investigational procedure itself cannot be billed to third party payors. The $800 reimbursement per patient may be relatively less burdensome as far as protocol-mandated tests and procedures are concerned, and the procedure itself can be billed to third party payors. The cost and status of the investigational drug or device must also be fully understood during the cost analysis. Investigational drug cost is usually pretty straightforward. The sponsor will disclose whether it is provided free of charge (it usually is) or whether the site will be billed. Investigational device cost is a little more complicated. This will be addressed later on. Indirect Costs Administrative overhead fees can be negotiated. This will not be readily offered in the proposed study budget. This fee can vary from institution to institution. Fifteen to twenty-five percent are reasonable fees to charge, depending on your cost of support personnel for regulatory, grants/contracts and secretarial services, as well as the physical plant where you will be doing the research. Institutional Review Board (IRB) fees for submission of protocols can be charged to the sponsor as a pass-through expense. Submission of amendments and the annual review can also be charged in this manner. As with the administrative overhead, these fees are not readily offered in the proposed study budget. Miscellaneous expenses are fees you can charge the sponsor, such as any legal fees incurred if the study is turned down by the IRB or if the sponsor decides not to pursue the study (for whatever reason) prior to getting the study up and running. Device Cost The sponsor will often disclose whether they will be providing the investigational device (ID) for free or they will charge the site (usually on a consignment basis). If there is a charge for the ID, the manager must figure out whether this charge may be billed to third party payors or will be absorbed by the study budget. For this decision, the manager should involve the Finance/Billing department of the institution. Mechanisms should be put in place to readily identify patients who received an ID. This will allow you to have their bills pulled out of any automated billing systems and avoid potential problems with inappropriate billing. The Food and Drug Administration (FDA) in its Investigational Device Exemption (IDE) approval letter will designate a device category (Figure 4). A designation of Category B will allow the institution to seek approval from the Fiscal Intermediary (FI) to bill for the device and/or procedure. A word of caution: a Category B designation does not automatically guaranty approval. The institution must submit all appropriate documentation to ensure claims will not be denied. A Category A designation means that the device is purely investigational and may not be billed to third party payors. Cash Flow Enrolling a patient in a clinical trial does not mean you realize the reimbursement immediately. Most clinical trial agreements will stipulate certain milestones that need to be reached before the site can get paid. Payment is usually dependent on the timely submission of CRFs. You may not be able to bill for the service rendered until several weeks later because CRF completion is one of the more time-consuming activities of an RCA. This activity is further dependent on the availability of source documents (patient medical records) and independent monitoring by sponsor representatives. The manager must allot realistic CRF completion goals to the RCAs to ensure streamlined submission of CRFs. You can invoice the sponsor as soon as the RCA meets the milestone set forth by the protocol. Invoicing keeps the sponsor in sync with the site and further reduces the delay in receiving payment. During contract negotiations, the manager should steer away from language that will only allow payment for every X number of patients enrolled, unless there is high confidence that these quotas can be met without any problems. Other language to be avoided involves quarterly payments. The ideal payment schedule allows you to invoice monthly according to the milestones satisfied by research staff. Expenses As with any department, the manager must be very cognizant of other line items in the operational budget. Monitoring the utilization of other than personnel services (OTPS) expenses will help ensure that the department does not go over budget. The manager must negotiate with different departments of the hospital and physician services for fees to be paid for protocol-mandated tests and procedures. It is ideal to have this agreement prior to starting any clinical research activities. Once the fee schedule is agreed upon, it can be applied to other research protocols as necessary. The manager must negotiate to pay at cost or near cost for all research-related services. A good argument can be made for not paying the listed price for the service because these tests and procedures are research-related. Putting It All Together By being prepared, the manager can better predict whether a certain study can be at least cost neutral. Involving and informing the physician investigator, doing a cost analysis of the proposed study reimbursement, involving the institution, and negotiating costs of tests and procedures all allow the manager to go back to the sponsor and negotiate. Clinical research compliments the activities of the cath lab in a positive way and should be considered whenever possible. Balanced with a good budget, it will enhance the delivery of patient care.

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