Advarra

	Budget Preparation on Site	Budget Negotiations with Sponsor
Site A	US-based site in the same city as Site B Prepares budget based on internal coverage analysis process (understanding what items may/may not be covered by Medicare and other insurers)* Notes not all standard of care (SOC) items/services are covered by Medicare and requests additional sponsor funding to cover these items/services	Budget negotiations become challenging due to the requested coverage for SOC items/services After numerous rounds of back-and-forth redlines in emails (time delays) the site and sponsor reach a standstill; negotiations are escalated, and a conference call is scheduled
Site B	US-based site in the same city as Site A Requests higher rates for items/services in the budget, including fees for conducting the actual procedures and inflation costs over the life of the trial Requests additional funding for a specific lab test not performed locally Does not address SOC items/services and accepts what is noted on the sponsor’s budget	Budget negotiations are “quick and easy” Budget is approved, and the contract is executed in a timely manner
Site C	US-based site in a different state on the opposite coast from Sites A and B Prepares budget based on local coverage analysis process, understanding what items may/may not be covered by Medicare and other insurers* Notes many SOC items/services are likely to be covered by Medicare except for a few	Budget negotiations are smooth as the site is only asking for a few additional SOC items Budget is approved, and the contract is executed in a timely manner

Budget Preparation on Site

Budget Negotiations with Sponsor

Site A

US-based site in the same city as Site B
Prepares budget based on internal coverage analysis process (understanding what items may/may not be covered by Medicare and other insurers)*
Notes not all standard of care (SOC) items/services are covered by Medicare and requests additional sponsor funding to cover these items/services

Budget negotiations become challenging due to the requested coverage for SOC items/services
After numerous rounds of back-and-forth redlines in emails (time delays) the site and sponsor reach a standstill; negotiations are escalated, and a conference call is scheduled

Site B

US-based site in the same city as Site A
Requests higher rates for items/services in the budget, including fees for conducting the actual procedures and inflation costs over the life of the trial
Requests additional funding for a specific lab test not performed locally
Does not address SOC items/services and accepts what is noted on the sponsor’s budget

Budget negotiations are “quick and easy”
Budget is approved, and the contract is executed in a timely manner

Site C

US-based site in a different state on the opposite coast from Sites A and B
Prepares budget based on local coverage analysis process, understanding what items may/may not be covered by Medicare and other insurers*
Notes many SOC items/services are likely to be covered by Medicare except for a few

Budget negotiations are smooth as the site is only asking for a few additional SOC items
Budget is approved, and the contract is executed in a timely manner

What Is Really Going on in the Above Scenarios?

Site A creates great delay and frustration on both sides. What went wrong with Site A’s negotiations? How can two sites from the same city request such different budgets, and how can Site A and Site C vary so much in what is considered SOC?

LCDs vary by region, explaining the difference in SOC coverage for Site A and Site C.

The difference between Site A and Site B stems from institutional processes—Site A appears to have a consistent process in place to evaluate Medicare’s coverage of items and services for the conduct of a clinical trial. On the other hand, Site B may not have a process in place to evaluate Medicare’s coverage of items and services for the conduct of a clinical trial, or their process may be less well-defined, or they may have different interpretations of what is covered.

The sponsor may not understand Medicare’s coverage and impact on drug and device clinical trials and the differences in LCDs. It’s also possible they cannot afford to provide this additional funding to the site. This disconnect can create angst and negative financial implications for both sides. At best, the site and the sponsor agree on a budget, and, at worst, the sponsor or the site opt not to participate in the study. This is a disappointment for all parties, including potential participants interested in participating in the clinical trial.

Education and communication are key components a site can use when working with its sponsors. Sites can prepare a resource toolbox for sponsors and provide it as early as possible—sometime after the confidential disclosure agreement (CDA) is executed and before budget negotiations commence. This toolbox helps maintain positive working relationships, prevents surprises for both sides, and avoids wasted resources in developing and negotiating a budget that may not get approved. Possible resources for the toolbox include copies of the regulations, summary statements, white papers, journal articles, and a flow chart/diagram of your institution’s specific processes. While the toolbox takes time to develop up front, it saves valuable time during budget development.

Conclusion

The negotiation of a clinical trials budget is a time-consuming and often daunting task for sponsors and sites. Inaccurate budgets result in astronomical financial losses for both sides. Moreover, budget negotiation delays themselves can have negative financial impacts, creating frustration and loss of goodwill. And we cannot forget participants may also incur losses: if a study they planned to volunteer for is significantly delayed or will not open at all, this could negatively impact their health and hope. If communication is open and expectations are addressed early in the site selection process, budget development and negotiations can be streamlined and virtually seamless.

Take the first step toward more efficient and successful clinical trials today

Reduce your trial activation timeline by 76% with our services. Give your staff time back to focus on what matters most: research.

Effective as of 2007, Medicare has offered coverage for routine costs in clinical trials. However, in order to be eligible for extended coverage under a clinical trial, several requirements must be met. The checklist below offers a step-by-step process to determine whether your clinical trial meets the requirements of the National Coverage Determination (NCD) for Routine Costs in Clinical Trials. In addition, several insights are highlighted to best prepare you for the road ahead.

To print this checklist, right-click and select ‘Print’. You can then use this checklist offline as a PDF if desired.

Step One: Documents Needed

Protocol

Lists all required assessments under a clinical trial, and includes information needed to determine whether the study meets Medicare’s requirements for coverage.

Informed Consent

Includes known human side effects associated with the investigational agent, notes items/services/agents patient receives free of charge.

Sponsor Budget

Identifies what items/services sponsor reimburses, and therefore not eligible for Medicare coverage.

Optional Documents

Clinical trial agreement
Lab manual
Investigator brochure (IB)
Pharmacy manual
Approval letter from the Centers for Medicare & Medicaid Services (CMS), including investigational device exemption (IDE) devices
Sponsor-provided billing determinations

Step Two: Medicare Eligibility

Is a Medicare Coverage Analysis (MCA) Required?

Are there any protocol-required assessments to be billed to Medicare, insurance, or the patient?
If the answer is no, an MCA may not be needed as no items are being billed to Medicare. However, this may continue to be of use to identify all costs associated with the clinical trial.

Determining the Qualifying Status

If an MCA is required, does this clinical trial qualify for Medicare coverage?

The following requirements are needed according to the National Coverage Determination (NCD) 310.1, “Routine Costs in Clinical Trials.” The exact requirements terms can be found on the CMS website.

1. The study must fall under one of the benefit categories listed on NCD 310.1.

- Ex., drugs and biologicals.
- Devices: Please note, devices do not fall under a Medicare benefit category. FDA-approved IDE devices may be deemed qualifying under the Medicare Benefit Policy Manual, Chapter 14. Other devices, such as premarket approvals (PMAs) and 510ks, are not considered as qualifying clinical trials and do not require research modifiers to be eligible for coverage.

2. The study must have therapeutic intent or aim to treat the disease.

- Safety, quality of life, and pharmacokinetic (PK) responses are not considered to be therapeutic objectives

3. The patient must have a diagnosed disease.

- Healthy patients who would otherwise not need treatment cannot seek extended coverage.

4. The clinical trial must have one of the following qualifications in order to be automatically deemed eligible for coverage:

- The trial is funded and/or supported by a federally funded cooperative group (ex., National Institutes of Health [NIH], Children’s Oncology Group [COG], etc.).
- The investigational agent in the trial has an FDA-issued investigational new drug (IND) approval and associated six-digit number.
- The investigational agent is considered IND exempt per the following criteria:
  1. The drug is lawfully marketed in the United States.
  2. The study is not intended to support use in a new patient population or create a significant change to the drug labeling.
  3. In prescription drugs, the study is not intended to significantly change the associated advertising for the drug.
  4. The study does not involve a new route of administration, dose, patient population, or other factor significantly increasing the drug’s risk.
  5. The study is conducted in compliance with institutional review board (IRB) review and informed consent requirements.
  6. The study is not intended to promote or commercialize the drug.

Step Three: Covered Items and Services

The following indications and limitations are listed in NCD 310.1 for assessments required under a protocol.

Indications

Conventional care: The item/service is provided in absence of a clinical trial.
- These assessments are supported by Medicare-approved guidelines and/or journal articles.
Side effects: Items/services used to prevent complications or monitor known human side effects of the investigational item.
- These side effects can often be found in the informed consent form (ICF), as the patient must be aware of what known risks are associated with study participation prior to consenting.
Administration: The provision or administration of the investigational item.
Reasonable and necessary: Items/services clinically necessary for the diagnosis or treatment of complications associated with the investigational item or underlying condition.

Limitations

Investigational item: The investigational item, unless otherwise covered outside of the scope of the clinical trial.
Research assessments: Items/services solely required for research purposes that are needed for the clinical management of the patient.
Inconsistent costs: Coverage is to be determined on a patient population basis, not on a patient-by-patient basis per individual health factors.

Further Considerations

Non-qualifying Trials

Select studies may continue to receive coverage under Medicare, even if determined to be “non-qualifying.” Consultation from a Medicare expert in the research field is required to confirm coverage status.

“Seven Desirable Characteristics”

NCD 310.1 notes a list of seven desirable characteristics assumed to be met in a qualifying clinical trial, as noted below. Per a reconsideration/revision of NCD 310.1 in 2007, deeming a clinical trial to be qualifying by solely pointing to the seven desirable characteristics below is not recommended. Qualifying trials will need to meet the qualifications above to qualify for Medicare coverage.
- The principal purpose of the trial is to test whether the intervention potentially improves the participants’ health outcomes.
- The trial is well-supported by available scientific and medical information or it is intended to clarify or establish the health outcomes of interventions already in common clinical use.
- The trial does not unjustifiably duplicate existing studies.
- The trial design is appropriate to answer the research question being asked in the trial.
- The trial is sponsored by a credible organization or individual capable of executing the proposed trial successfully.
- The trial is in compliance with Federal regulations relating to the protection of human subjects.
- All aspects of the trial are conducted according to the appropriate standards of scientific integrity.

Additional Medicare Statutes

Coverage is subject to NCDs, region-specific Local Coverage Determinations (LCDs), and other Medicare rulings (ex., Medicare Benefit Policy Manual). Even if the clinical trial qualifies under NCD 310.1 and a specific item/service is indicated for coverage under the points above, coverage is continually subject to these Medicare resources. NCD 310.1 does not trump any NCD or LCD determinations.

Take the first step toward more efficient and successful clinical trials today

Reduce your trial activation timeline by 76% with our services. Give your staff time back to focus on what matters most: research.