OCR Finance offers a range of services to assist investigators and research personnel with the pre-award submission process and the post-award management of industry-funded clinical trials. These services include:
- Assisting with creating a Medicare coverage analysis (MCA)
- Helping with budget development and negotiation
- Ensuring consistency of all clinical trial documents (MCA, Budget, CTA, ICF)
Principal Investigators, appropriate research staff, and the business administrator are responsible for ensuring the completion of the Prospective Reimbursement Analysis (PRA) for each study, documenting the presence of clinical services and delineating between what will be charged to research and what will be charged to a subject's personal family insurance.
This workbook contains Excel worksheets that will provide guidance to research teams. Please insert as many columns and rows to this worksheet as needed to reflect the timepoints in your protocol. PRA MCA Budget Template
- Prospective Reimbursement Analysis Template
- Medicare Coverage Analysis/Budget Template
- Study Team Time & Effort Template
For industry funded studies, please upload the PRA MCA Budget Template into your proposal in PennERA. For federal and internally funded studies, please email the PRA MCA Budget Template to firstname.lastname@example.org.
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.
An 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.
Since an MCA reduces the risk for submitting erroneous claims by identifying which services are paid for by sponsors and which services are for research purposes only, it is the basis of research billing compliance. An MCA is the first step in developing an internal budget.
An MCA is prepared by the study team. The preparer consults with the Principal Investigator (PI) while preparing the MCA so that the PI’s expertise and insight are reflected in the final documents. The final MCA should be used by the research coordinators and billers to ensure that all bills reflect the correct payer. OCR Finance reviews the MCA as part of the PennERA study submission.
In addition to the Coverage Analysis charge designations for your research study, OCR offers budget creation and negotiation services. OCR works with investigators and their study teams to develop budgets for clinical trials and negotiates terms with industry sponsors. Generally budgets should be developed only after a coverage analysis has been approved, unless fully funded by the Sponsor.
The budgeting team can help to:
- Develop protocol-specific budgets and negotiate with sponsors to ensure adequate financial support
- Assist the PI in projecting the costs for investigator-initiated trials
- Ensure the use of standardized costs for research procedures and clinical trials across multiple programs
- Ensure that appropriate budget and payment terms are included within the clinical trial agreements
Guidance for developing an industry-sponsored budget:
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 35%, 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%.
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 the Office of Research Support Services (ORSS). Click here to contact ORSS
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.
The following is a list of potential expenses involved in the conduct of a study:
Estimate the amount of time for the PI, coordinator(s), and any other staff that would be paid out of the study budget (i.e. research assistants, administrative staff, statisticians). This estimate should include salary and fringe benefit costs.
Labs, Tests, and Procedures
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 that 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 a professional fee, as do various other procedures. All costs should be based on the currently approved professional "research rate".
These charges may be incurred per visit or per subject. Examples include monetary compensation, meals and parking/transportation costs. The budget amount should agree with the amount noted in the Informed Consent Document.
Other potential study expenses to consider:
- Training/Seminars/Conferences (directly related to the research project)
- Travel expenses
- Institutional Review Board (IRB) fees
- Investigational Drug Service (IDS) fees
- Clinical Research Computing Unit (CRCU) fees
- Biostatistics and Epidemiology Consulting Center (BECC) fees
- External Monitor or Contract Research Organization (CRO)
- Radiology Core Facilities
- Travel Expenses
- Screen failures
- Blood collection tubes, chemicals, dry ice
- Centrifuges, mass spectrometers, liquid simulation counters
- Technology (e.g. telephone, computer)
- Shipping/Packaging Supplies (e.g. dry ice)
- Service Contracts (e.g. instrument maintenance)
- Medical Record Retrieval
- Archival fees
- Site Visit & Site Initiation Costs
Facilities and Administrative Cost
Facilities and Administrative (F&A) cost is the indirect cost associated with the project or study, e.g. space, research administration, facilities, maintenance, etc. The Penn standard approved F&A rate is 35% for industry-sponsored studies (see attached memo).
The PSOM faculty or research staff member that initiates a discussion with an external entity to provide funding for a PSOM research study is responsible for notifying the Sponsor of the F&A rate at the beginning of the negotiation process. OCR Finance is available to assist with negotiating budgets and informing sponsors of the prevailing rate.
For industry-sponsored studies, F&A is applied to all costs for industry-sponsored studies, except for IRB fees.
Studies that fall into this definition use the industry-sponsored clinical trial rate:
Prospective, interventional trials, registry studies, generation of clinical trial protocols, and the provision of clinical services in clinical space in connection with a clinical trial (e.g., core clinical lab services). Any other activity is presumed to be subject to the DOD F&A rate.
If a member of the Penn research community is uncertain as to whether the clinical trial F&A rate applies, s/he should consult with his or her business office before discussing a budget using the clinical trial rate with a sponsor. If the business office requires guidance, OCR Finance should be consulted. OCR Finance will consult with ORSS in cases of uncertainty.
CostFinder is a tool that provides the research rates for both Hospital Billing (HB) and Professional Billing (PB) components of an item/service/procedure. Please update any bookmarks or favorites to reference the new link as the old CostFinder site has been retired. Please note that you must select at least one entity (HUP, PPMC, PAH OR CCH) prior to searching for results as pricing may vary by entity. You are able to search by CPT code (preferred) or procedure name.
You may access the CostFinder tool through http://my.med.upenn.edu/
Templates and Reference Documents
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