Site Payment Best Practices: The Burden of Holdbacks

The Society for Clinical Research Sites (SCRS) recently took a look at the various burdens currently facing clinical research sites when it comes to receiving payments from its sponsor / CRO partners. The whitepaper proposed a series of best practices for site payments, including:

• Contract terms (payment frequency): Payment within 30 days
• Contract terms (pay when paid): Limit clauses to cases where the sponsor has filed for bankruptcy
• Payment back-up information: Accompany each payment with a detailed report to avoid confusion over the reason for payment
• Holdback payments: Eliminate holdbacks
• Dispute resolution: All contracted parties should include an escalation process and contact information in standard study documents

In this blog post series, we will take a look at each of the recommendations in the paper and how an automated payment solution can support these best practices and ultimately improve site satisfaction and performance.

First in line: Holdbacks.

What is a holdback?

A holdback is a contract term that enables sponsors and CROs to literally, hold back payments from sites until various study milestones have been completed or queries have been resolved.

Why would a sponsor or CRO use holdbacks?

Holdbacks evolved as a way for sponsors and CROs to ensure that their sites were completing the necessary work throughout a clinical trial.

Contingent upon the completion of a study, payments are typically held until all sites involved meet the various study milestones and resolve all queries. Used to “motivate” sites to complete their work and attempt to drive a site’s performance, holdbacks would help a sponsor/CRO to control their own cash flow by standardizing when to pay their sites.

So, how do holdbacks impact sites?

According to SCRS,  65% of sites have less than 3 months of operating cash, meaning that when sponsors/CROs holdback portions of a sites’ payment, they can greatly affect the sustainability of site, and negatively impact their ability to support the research study.

How can sponsors and CROs eliminate holdbacks?

As SCRS states in its “Site Payment White Paper”, almost 100% of studies are conducted with an EDC system, meaning sponsors and CROs have full transparency and visibility into their sites’ activities. However, 58% of US contracts and 37% of ROW contracts still contain holdback payments.

For sponsors and CROs looking to eliminate holdbacks, there is technology that provides full visibility and transparency into the work a site is completing. Taking this a step further, there is even technology available that is entirely focused on centralizing site payments, making the elimination of holdbacks not only possible, but simple.

Automated payment solutions such as eClinicalGPS can be configured to pay sites monthly and trigger payments upon completion of study milestones – both procedural and visit based.

In the end, by eliminating holdbacks, sponsors and CROs can strengthen their site partnerships while supporting site sustainability by paying their sites quickly for the work they have completed. It is no surprise then, that the SCRS Site Payments White Paper recommends that holdbacks are eliminated entirely.