Budget Development
Budget development is an important piece of clinical trial management. There are different considerations if the budget will be federally funded, funded by industry or if the trial is investigator initiated.
Federal Budgets
When requesting funding for a study, all study-related costs should be noted in the budget, including personnel, consultants, equipment, supplies, travel, and other expenses. NIH applications have special budget and justification forms that contain detailed instructions. Penn investigators must have their grant budgets approved by Office of Research Support Services (ORSS).
Industry Sponsored Budgets
When considering an industry sponsored-study, all study related expenses should be determined and compared to the overall reimbursement offered by the sponsor to ensure the study is financially feasible.
- The sponsor of a clinical trial generally sends a protocol and budget overview/template for the trial.
- After reviewing the protocol and events schedule, create an internal budget to reflect all costs, including time and effort of all personnel, in order to conduct the trial.
- Determine which services are standard of care versus which will be billed to research.
- Note: You may not bill insurance for a drug, test, device, or service paid for by the sponsor.
- Determine if the labs and testing procedures will be done in-house or at the sponsor’s site.
- Determine if there will be professional charges required for the technical tests performed.
- A study start-up fee must be included in order to cover the following costs: protocol review, staff training, budget preparation, regulatory documents, and administrative fees.
- There are one-time costs that should be included in the budget, if applicable: IRB fees, IRB continuing review fees, IRB amendment fees, investigational drug set-up fees, MCA preparation fee, archive fees, and advertising costs.
- PSOM has instituted a clinical trial indirect cost rate of 39%, which is an additional charge that must be applied to the total direct study costs. Only IRB fees are exempt. Indirect costs cover a small part of PSOM’s infrastructure costs for research.
- For multi-year clinical trials, consider adding an inflation rate of 5% to the per-completed-subject cost.
- Holdback on a trial should not exceed 10%.
Investigator Initiated Studies Budgets
Penn sponsor-investigators should develop a budget based upon the expected expenses at each site. Billing rates for the same procedure will vary from place to place.
To develop a budget work with your department BA and the Office of Clinical Research Finance group can also assist.
Budget Preparation and Management FAQs
A: You should work with your department BA when developing a clinical research budget. The Office of Clinical Research (OCR) Finance Services can assist when needed.
A: The Office of Clinical Research (OCR) has developed a template to help create clinical research budgets. In addition to the template, Costfinder can be used to look up hospital services by searching on CPT codes to find given research rates.
In addition to the template, use the Cost Finder application (navigate to the Forms, Tools and Templates library) and search in categories
A: The PRA is a questionnaire designed to make a determination if a clinical trial is a qualifying clinical trial. A qualifying clinical trial means standard of care services can be charged to insurance if needed.
A: A Medicare Coverage Analysis (MCA) is a document that determines the appropriate payer (sponsor, Medicare, or third-party) for each item and service required by a clinical research trial. A MCA is required for all clinical trials in which tests, procedures, and interventions associated with a clinical trial are invoiced to third-party payers, and/or when research procedures are paid for by sponsors.
A: When requesting funding for a study, all study-related costs should be noted in the budget, including personnel, consultants, equipment, supplies, travel, and other expenses. Some common expenses are:
- Start-up costs
- Site Visit & Site Initiation Costs
- Institutional Review Board (IRB) fees
- Investigational Drug Service (IDS) fees
- Supplies
- Blood collection tubes, chemicals, dry ice
- Centrifuges, mass spectrometers, liquid simulation counters
- Technology (e.g. telephone, computer)
- Shipping/Packaging Supplies (e.g. dry ice)
- Advertising/Recruitment
- Archival fees
- Sub-contracts
- Clinical Research Computing Unit (CRCU) fees
- Biostatistics and Epidemiology Consulting Center (BECC) fees
- External Institution or Contract Research Organization (CRO)
- Service Contracts (e.g. instrument maintenance)
- Training/Seminar/Conference (directly related to the research project) travel expenses
- Screen failures
- Monitoring
- Travel Expenses
- VendorMate
- Regulatory Fees
- Document Preparation
- Document Submission
- Medical Director
- Medical Record Retrieval
- Data Management
- Data Safety Monitoring Board
- Closeout Fees
- Overhead
A: The current overhead rate can be found on the Office of Research Services (ORS).
A: The university uses the research billing application (RBA) to generate research billing numbers (RBN). A research billing number (RBN) is a protocol-specific number used by the University of Pennsylvania Health System (UPHS) to bill research-only UPHS services/procedures to a School of Medicine fund set up for the protocol (e.g., research fund, departmental fund, etc.). There can only be one RBN per IRB Protocol Number. All studies, regardless of payor, need to be registered in the Research Billing Application before they are loaded into Penn Chart (Epic) and enrollment can begin. A User Guide for the RBA is available.
Hospital fees are made up of either technical fees or professional fees. The definition for each is below:
Technical Fees - A technical fee is the cost incurred for use of the mechanical equipment and processing. Tests/procedures that are study related and are not "standard of care" must be charged to the research budget. All costs should be based on the currently approved technical "research rate".
Professional Fees - The professional fee is the physician's charge for interpretation of diagnostic procedures/tests. It is important to note, if there is a professional fee associated with a test/procedure, you must include that charge in your expenses. A limited number of laboratory tests have professional fees associated with them. All radiology and cardiology procedures have an associated professional fee, as do various other procedures. All costs should be based on the currently approved professional "research rate".
A: Only for hardship purposes can research funds be used to offset unpaid insurance claims, deductibles or co-pays. Medicare’s policy is referenced below:
A research patient must, like all other patients, be responsible for deductibles and co-payments. Investigators may not induce patients to participate in clinical trials and fore go standard therapy by promising to waive these payments. Nor may the investigator offer as an enrollment incentive any free items or services to patients unless these items or services are customarily provided without charge to patients not enrolled in clinical research. (This does not prohibit, however, hardship discounts when applicable.)
Medicare has no obligation to pay for items and services if a provider treats Medicare beneficiaries differently from non-Medicare patients or if other situations trigger Medicare exclusions. The provision sets out limited situations (such as patient indigency) when waiving charges for non-Medicare patients will not disturb Medicare coverage.
The “No Legal Obligation to Pay” provision addresses scenarios such as billing Medicare for a service while not billing non-Medicare patients for the same service. This provision of the manual operates to prohibit billing Medicare for the same service that is provided free to non-Medicare beneficiaries. In such a case, Medicare has no legal obligation to pay for the service and the provider also cannot charge the Medicare beneficiary.
Into this provision CMS inserted clinical research situations. The Special Edition Article advances the idea that if a provider does not charge a non-Medicare enrollee for a research study service, then the Medicare enrollee must also receive that same study service free. If the provider does not pursue collections against the research subject after the patient’s insurance denies coverage, CMS argues that the provider’s actions disallow billing for the same service for Medicare patients enrolled in the study.
A: Each sponsor has their own regulations on all financial reporting and retention of documents. Review the contracts associated with each study to ensure financial requirements are being met. To ensure proper financial management, study expenditures should be reviewed on a regularly basis and should comply to the University’s policy 2106 which can be found here: https://www.finance.upenn.edu/policy/2106-financial-responsibility/.
A: The Effort Reporting System (ERS) is used to certify effort applied to research. Effort reporting is mandated by the federal government. If you receive an effort report, you should log into ERS, review the effort report, suggest changes if needed and certify the report. Effort Reporting System FAQs
A: Penn uses Workday@Penn for all its human resource needs. All new positions must be submitted in Workday for approval. Please consult with your Business Administrator (BA) and Human Resource Manager prior to posting a position.
For more information regarding hiring a staff member
A: Penn’s preferred method for patient reimbursement is Greenphire. Greenphire is a reloadable prepaid clincard. More information about Greenphire click here: https://www.finance.upenn.edu/payments-disbursing-funds/paying-program-participants-via-clincard.
A: Funding sponsors can pay via check or wire transfers. Click here for additional information https://researchservices.upenn.edu/areas-of-service/research-operations-and-cash-management/