Recent trends in the 2023 SCRS Site Landscape Survey demonstrate that we are finally moving away from quarterly payments and instead moving towards monthly payment standards. However, there is still opportunity for improvement. While better payment terms are important, sites also need to establish processes to ensure efficient compensation.
Accounts receivable aging is still a concern for many sites with 42% of sites reporting that nearly a third of their accounts receivable is more than 90 days old. Considering that 79% of sites also report having less than 6 months of operating capital available, it is clear that site cash flow struggles are still a factor. Financial issues will ultimately cause sites to pass on certain study opportunities or even worse, can force sites to shut down their operations altogether. In both scenarios, treatment availability for patients is in jeopardy.
Earlier this month I attended the SCRS Global Summit, where I had the honor of facilitating a panel discussion on how to improve timely site payments. I heard firsthand from several sites about the challenges they face as well as successful tactics they have employed to drive toward timely payments. The power dynamic between sponsors/CROs and sites can be complex, however, here are five tactics that sites can use today to improve on-time payments:
- Clarify when the clock starts for your payment terms. Getting agreement on the coveted Net 30 payment terms is surely a win, but when does that 30 day clock begin? In some cases, standard visit-based payments are automatically paid based on the activity dates. In other cases, payments are not eligible until monitored or until they are requested through a form invoicing process. During contracting, it’s imperative to work with your sponsor/CRO to clarify when the clock starts so you can build your payment aging reports accordingly.
- Request an attached invoice template as part of your fully-executed CTA. Many sites have shared the experience of submitting an invoice, later to find out that certain information is missing. The missed information could be due to human error or it could be due to confusion on the required details. One simple way to set clear expectations is to ask your sponsor/CRO to attach an invoice template to the CTA. Aligning on payment requirements early in the relationship allows sites to clarify expectations before the first payment is requested.
- Identify a finance point of contact for escalations. Working with a large pharmaceutical company or CRO? If so, you’ve likely experienced getting a general email contact like “payments@CRO.com”. While it may feel like you’re sending your inquiries into oblivion, there is likely a ticketing system behind that inbox with closely tracked resolution metrics. However, general emails sometimes fail to deliver a timely resolution and an escalation plan must be in place to keep the ball rolling. At the beginning of a study, ask your sponsor/CRO for a specific payment point of contact and set expectations on an escalation plan. Taking into account high industry turnover, try to get two contacts if you can, ideally with phone numbers you can call. A short verbal conversation often speeds up resolution times significantly. You will also save time from writing countless follow up emails!
- Establish an invoiceable tracking process. Invoiceables and pass-through costs typically only make up 10-30% of clinical payments, but can play a large role in payment delays. Sites should ensure that the internal resource helping to finalize CTAs is also optimizing invoiceable tracking in their CTMS. For example, some CTMS solutions offer the ability to auto-tag certain events as invoiceable, allowing you to easily pull an invoiceables report when the time comes for submission. Finance is part of everyone’s job and each team member should understand how their role impacts financial outcomes. Educate your site coordinators about the financial impact of their work so they understand the importance of logging invoiceables during the visit. An invoiceables checklist can be very helpful to track what is relevant to a specific patient visit, what pass-throughs have already been requested and what still needs to be paid. Don’t wait until the end of the month or quarter to start retroactively identifying invoiceable costs as this will increase the likelihood of something falling through the cracks.
- Implement dedicated oversight. Having dedicated resources for oversight and performance tracking will take your operations to the next level. Site networks may have the luxury of a centralized payments team, but bandwidth is a challenge for smaller, single sites. When it is not feasible to have a dedicated employee, consider outsourcing to a Trial Management Organization (TMO). Payment management is critical to financial viability and its importance should not be underestimated.
Strategizing the right approach early in the trial is key to reducing many of the headaches associated with site payments. By complementing procedural best practices such as those outlined above, with specialized technology, such as Greenphire’s eClinicalGPS, sponsors and CROs can truly drive efficiency, clarity and cohesion, positioning themselves as a sponsor of choice. As the industry continues to innovate and share ideas on how to tackle challenges, we can continue to make it easier for sites to get paid accurately and on time.
Want to learn more about how Greenphire can complement your processes and streamline site payment workflows?
- Check out our eClinicalGPS site payments solution
- Take the next step – Request a demo
