Q & A -


By Sarah Roberts, Site Relationship Manager; Pam Lowery, Director of Site Services

Q: What mistakes do institutions often make with regard to RCM?

A: One example of an incorrect assumption in which institutions and sites make surrounds payment trigger language in the contract. It should not be assumed that a payment will “automatically” be made after patient activity is monitored. It is critical to track exact amounts owed, even when utilizing a system. There have been many times we have performed audits for clients, where full visits have been “skipped” when reconciling payment. At that point PFS Clinical contacts the CRO/Sponsor to inquire about amounts and timelines for payment. Typically, we find an issue as to why it was not paid. When the issue is a “site” issue (i.e. query reports are generated and once queries are resolved, the Site could argue that the payment would be released after issue is resolved. While this is true, some sites need their payments for those visits as quickly as possible, therefore contacting the payor and trying to understand why the visits were not paid becomes increasingly important. If the lack of payment is a Sponsor/CRO issue (held in their payment system), there may be an efficient way to resolve the hold. For example, the monitor may have placed a hold on the payment because he/she thought a complete visit did not occur. When catching this potentially large issues early, there may be a way to resolved them before the next payment cycle. In these types of situations, unless someone is asking about why it payment was not received, the potential for it to never be paid remains high. You can also have an issue when budget amendments are issued, especially when amendments are retroactive for visits that have already been paid at the old budget rates. I have also had Sponsors indicated that their system could not calculate the difference for the visits already paid, and the only way payment would be sent was after a site invoice was produced showing difference that they were owed. In summary, small assumptions can lead to large deficits. The process can be automated but is not automatic. It is imperative to perform study/patient reconciliations.

Q: How could institutions improve RCM?

A: Institutions need to develop a system or process in which they track exactly what they are owed on each study for every patient, all administrative costs, and invoiceable items. This can be done either internally or contracting it to a third party. A lot of potential customers cannot produce, in real time, exactly what they are owed on a study. They also struggle to generate accurate cash flow reports to ensure funds are readily available/accessible. This is true even for sites on cash-based accounting, as they still need to reconcile payments received versus payments owed. When institutions develop a process, certain items should be considered: quick view of each study and patient enrollment quantities; visits in which payment has been received and visits still to be paid; pass through costs remaining and received; and timelines for payment listed in the agreement (when to expect payment). Developing a process to accurately depict money in and money out for each trial will ensure the hard work that goes into a budget negotiation will literally pay off.

Q: What are good tactics for ensuring Sponsors/CROs pay per the agreed upon contract terms?

A: Another recommendation mentioned above, is for sites to develop a manner of tracking when payments should be expected, invoiced, or triggered for each month and each study. This will allow for timely follow-up with the Sponsor/CRO during the correct timeframe to ensure they are on schedule to be paid. If a payment delay is probable, then the site needs to understand how to correct the issue. The more information you have, the better your argument will be when escalating it up through management or past the CRO to the Sponsor. For example, sites have a much better argument stating, “I received a payment on xx date and it only paid for patients through xx. We are past due on another payment 3 weeks ago per our contract,” rather than, “I haven’t received any payments in months, can you please tell me when the next payment will be sent?” These tasks are burdensome and sometimes convoluted, however they are very important for financial viability.

Q: Regarding your work with larger institutions, how many PFS Clinical (PFSC) staff are needed to maintain the financial management and accounting for over 200 trials? Where is the delineation of responsibilities between PFS and the institution?

A: Every site has an account manager that is point person between the institution and PFSC. The number of employees dedicated greatly varies depending on the indication, level of invoicing and reconciliation required, and daily inquiries to and from sponsors and CROs. However, each PFS account manager has a team of four to five staff members completing various tasks for the institution. Once a contract is fully executed, the institution contracts department sends it to the account manager. The PFSC team reviews the contract and budget and creates a Patient Log based on the information. At month end, the institution, usually by department or therapeutic area, sends the visits completed during the month to the account manager. Also sent from the institution’s finance department are any pass-through items to be billed to the sponsor and payments received. The PFSC team calculates the revenue earned based on the visits completed and pass-through items, billing the sponsor based on the contract terms. End of month reports are generated and posted in PFSC’s online portal to be reviewed by chosen institution staff.

Q: From your experience with sites, particularly academic, that are doing a decent job in managing their clinical trials revenue cycle, are the pre-award (budgeting) and post-award (invoicing/collecting) teams integrated? Do they report up to the same person?

A: With the institutions that we work with, the pre-award and post-award departments are completely separate. PFSC receives the contract and budget once it is fully executed by the pre-award team so we can complete account receivable management. We communicate with the contracts department for clarification of budget language and fees or if an amendment is needed, but daily interaction is not needed.

Q: What is your advice for a site that uses the following non-negotiable payment method: The site must invoice by the 5th of each month, but they can only invoice for verified visits. The monitor comes every 6 weeks, and they then have 45 days to pay the invoice (if they agree with the invoiced items). Payment is made by a wire transfer from the sponsor in the UK. If we see patients the day after the monitoring visit, it is another 6 weeks, then waiting until the 5th of the month, then waiting another 45 days. Any comments or suggestions for communications with this CRO?

A: Unfortunately, the above example of non-negotiable payment terms is hard on your cash flow. There are a few ways to help make sure you are maximizing the payment when it comes. First, make sure the monitor is scheduling the visit every six 6 weeks. Sometimes, with conflicts between the sponsor and the site, the monitoring visits end up being 8-10 weeks apart. Keep on the monitor to schedule the visits timely. Also, if not all of your data is being verified by the monitor at each visit, you may want to ask them to stay for 2 or more days. Secondly, during the monitoring visit, have the coordinator or doctor keep a good record of the visits verified. This will help ensure that all visits monitored are invoiced to the sponsor. Lastly, stay on the sponsor regarding the payment so that it is received timely. If the payment is not received 45 days after the 5th, follow up regarding the status of the invoice. If the CRO continues to pay late, you can always express your concern to the sponsor directly to see if there is a hold up on the sponsor’s end as well.