The burden of slow payments from sponsors has been a site pain point for many years. In 2009, slow payments from sponsors was reported as the number one operational concern for investigative sites.¹ In 2016, 44% of global investigators rated slow payment from sponsors and CROs as the top burden associated with clinical trial operations.²
Despite this, sponsors operate on a “buy first, pay later” relationship with their sites, and many pay sites much later. New payment data reveals the average payment takes more than four and a half months.³ The delay in timely payments was confirmed (with an average of 140 days) in a recent analysis conducted by Forte for the MAGI Award for Excellence in Site Payments. This causes many issues that hinder the success of clinical trials.
Here we dig into some key challenges and provide key takeaways for sites to improve this process, based on the presentation “Sponsor Payments to Sites: How Long Does it Really Take?” co-presented by Forte’s Laura Hilty and Holly Leslie, Vice President, US Payments at DrugDev.
Increased investigator turnover
Maintaining positive cash flow is a huge challenge for many sites, with 66% of sites reporting they have less than three months’ operating cash on hand.4 In addition to direct study-related activities, sites have to pay bills for expenses such as rent and utilities.
These expenses almost always use the standard invoice timeframe of Net 30, which requires that the payee receive payment within 30 days. Terms that cause payments to be delayed beyond 30 days can be a threat to site sustainability for those who struggle to maintain positive cash flow. Unsurprisingly, guaranteed payment in 30 days is considered “very valuable” by 77% of research sites doing more than 5 studies per year.4
Otherwise, lengthy delays in payment result in high turnover rates among clinical investigators.
Lower quality patient experience
Of the sites that are able to stay in business, many may end up making late payments of their own. For example, 75% of sites reported reimbursement timelines have an impact on their ability to pay stipends and reimbursements to patients.5 Delayed payments to sites may actually cause subjects to temporarily go into debt.
Postponing payments to subjects can prevent them from completing a study, particularly if they are relying on that money to travel to and from the visit. As patient retention is critical to the success of a study, it’s important to ensure timely payment to subjects to prevent dropouts. Similar to site satisfaction, the timeliness of receipt of payment also affects patient satisfaction.
Lack of trust in site-sponsor relationships
Site payments often end up arriving even later than the agreed upon payment terms in the Clinical Trial Agreement (CTA). In fact, quarterly payments can translate into sites being paid approximately four and a half to six months after the work is performed.4 This can be attributed to slow internal processes of the sponsor, though there is often no penalty for lateness by fault of the sponsor.
Additionally, sponsors and CROs that hold back portions of the sites’ earned income cause greater delays to the site being paid in full for work delivered. In 2016, the average holdback of cash earned and paid to the site upon study closeout was around 12%.4 In some cases, holdback isn’t released until the data is locked study-wide, even if the site has completed all of their obligations.
Common frustrations such as late or missing payments, inaccurate amounts, and no documentation can cause sites to feel less motivated to put extra effort into that study.
Improving the investigator payment process
The good news is sponsors and CROs that aim to help sites don’t go unnoticed. The majority of sites pay more attention to sponsors and CROs that pay on time and accurately.5 This helps sponsors and CROs build trusting relationships and become preferred partners of happier sites, while also reducing the time they have to spend answering payment-related questions and issues.
When sites don’t have to spend their time chasing missing or late payments and worrying about cash flow, they can spend more time recruiting and caring for patients. In addition to sponsors and CROs, sites can also take action to ensure a better payment process.
Sites must take ownership of their finances
There are many things sites can do to ensure they are paid on time and accurately:
- Since only 70% of all payments are visit-driven,² log all events in a CTMS to help keep everything organized and ensure nothing is missed.
- Do not make assumptions; Invoices should be sent in a timely manner for each payment.
- Track all payments and follow up with the sponsor if payment isn’t arriving as expected.
- Create reminders to keep following up every week until you are paid, even following up more than once, if needed.
- Review all payments received and make sure that each one is accurate and clearly itemizes what is included.
- The finance and the clinical teams can work together by holding regular meetings to review and ensure all items are captured.”
Sites should proactively negotiate better payment terms upfront
There are several approaches sites can take for better payment terms:
- Try to include an interest fee on late payments in writing in the CTA.
- If possible, avoid holdbacks entirely, or have them apply only to patient visits, and not pass-through items or screen failures.
- If that’s not an option, request a cap on the holdback amount.
- Help convince sponsors by providing standard justification language and industry benchmark data.
- Be willing to walk away from a study opportunity if it’s not a good fit. It doesn’t hurt to ask for reasonable terms that can drastically improve studies, but accepting unfavorable terms can hurt business.
Slow and late payments can be devastating to sites and to the study as a whole, even affecting patient participation. Now more than ever, it’s important to decrease the timeline it takes sites to receive payment so clinical trials are financially viable.
Without change, the industry will continue to see a shortage of experienced sites, increasingly selective sites that turn down trials without fair payment terms, greater issues with site satisfaction, and a negative impact on trial performance.
We are clearly behind in a world where employees are typically paid bi-weekly and bills are due monthly. To catch up, let’s strive for timely payment to sites to be the rule and not the exception.
Learn more about solutions and tactics for site sponsor communications and financial planning:
Explore Forte Insights to learn about the Sponsor Invoicing Dashboard, a financial dashboard that captures the state of your invoices to help in assessing and reducing invoice payment turnaround time.
- CenterWatch Survey of 347 Investigative Sites (2009) Ken Getz from Site Solutions Summit 2010)
- 2016 DrugDev Global Investigator Survey
- Journal of Clinical Research Best Practices, Sponsor Payments to Sites: A New Award to Recognize Timely Payment, June 2017
- Society for Clinical Research Sites (SCRS), Site Payment (White Paper), October 2016
- Site Solutions Summit Survey of Investigative Sites in the US: 2013