Clinical Trials Administrative Start-Up Handbook

       Best Practices for Developing a Payment Schedule

As you read this information, remember that the Clinical Research Budget and Billing Office (CRBB) is available for hands-on help and advice at (206) 543-7774. CRBB staff can assist you in outlining a realistic payment schedule and can even help you negotiate the payment schedule with the industry sponsor.

• Read the proposed payment schedule in the sponsor's contract. Make sure that you understand the proposed payment schedule, and analyze its impact on your study. If the payment schedule seems almost impossible to understand, it's likely that the sponsor doesn't understand it, either, and that it will be unworkable for both of you. Consider writing and negotiating your own payment schedule.
  
  
• Ask for an upfront payment, payable upon execution of the agreement, not upon study initiation or patient enrollment. If you have negotiated a start-up fee, be sure to include it as part of the upfront payment. The upfront payment helps not only to cover your start-up costs but also to cover early study events such as patient recruitment and screening. Consider carefully the size of the upfront payment that you will require in order to keep afloat until interim payments are due. (Check with your department first because it may have its own policies for the amount of upfront money required.) Remember that if you don't request payment at execution of the contract, you will incur both start-up expenses and patient expenses before being reimbursed.
  
  
• Consider sending to the sponsor a written reminder for the upfront payment after the contract has been signed. Without such a reminder, the sponsor may overlook this obligation, even though you have included it in the contract.
  
  
• Ask for reimbursement of actual, reasonable start-up costs if the trial is terminated prior to initiation at your site or to enrollment of the first patient at your site.
  
  
• Negotiate the interim payments to fit the protocol and your particular situation. If 90% of the work is done in the first two months of a twelve-month study -- or if expensive procedures are scheduled early in the study, arrange to be paid accordingly. Interim payments are usually tied to milestones such as number of "enrolled," "completed," "randomized," or "evaluated" patients. Discuss with the sponsor the meaning of these terms, and consider the impact on your cash flow. Other milestones for interim payments may be determined by the number of completed patient visits, by monthly schedule, or by a hybrid of the above. Remember that it can take weeks for the sponsor to process a payment after they have ascertained that your milestones have been met. To avoid payment problems caused by sponsor monitoring delays, you might consider setting up a payment schedule by which you bill the sponsor as the work is performed.
  
  
• Do not overestimate, for the purpose of ensuring a comfortable cash flow, the number of patients you can enroll. The success of the sponsor's overall study plan depends on accurate enrollment estimates at each site. If your patient recruitment does not closely match your estimate, you will lose credibility with the sponsor, and the sponsor may go elsewhere with future trials.
  
  
• Determine at what point your study will suffer a financial loss if your enrollment goals are not met. By doing this, you will help ensure that you have negotiated sufficient funding per patient, even if enrollment was more difficult than anticipated.
  
  
• Keep track of which records the study monitors have reviewed during their site visits. Because interim payments may be generated from the study monitor's review of your case report forms, this parallel tracking will help to assure that you are paid correctly.
  
  
• Discuss with the sponsor how the final payment will be triggered. Consider again the study protocol and your specific situation. The sponsor may, for example, want to withhold a substantial percentage of the total budget until it reviews and approves all case report forms (CRFs). This may take additional weeks or months. After the study is completed at your site, the sponsor will have collected your completed CRFs, so the sponsor may be less motivated to pay promptly. It is also possible that the sponsor will choose to review your forms only after the study is over and close-out has occurred at all sites. Therefore, you may want to ask for the final payment when you submit your completed CRFs to the sponsor. Communicate your needs to the sponsor and prepare to compromise only if it doesn’t put the financial stability of the study at risk.