How to Manage Specialist Site Payment Providers

15th October 2018 (Last Updated December 3rd, 2018 10:06)

Jeff Nelson, VP Program Management, Mateon Therapeutics, explores the rise of specialist payment providers

How to Manage Specialist Site Payment Providers

Over the last 10 years, specialized vendors have emerged with technology designed to improve the process of paying clinical sites during studies. However, utilization of these services remains relatively low, around 25 percent.1 The wide adoption of electronic data capture (EDC) and other systems, such as clinical trial management systems (CTMS) and interactive web response systems (IWRS) has shown that sponsors benefit from technology by improving timelines, trial efficiency, and data accuracy. I believe that the low adoption rate for site payment technology may be due to a lack of clear independent information on what risks these systems mitigate, and where they are most appropriate to implement.

Following a large multi-national clinical trial, an open ended survey asking sites, “what could we have done better” yielded some relevant results.2 The most common answer, at around a third of respondents, was to reduce CRA turnover. Surprisingly, the second most common answer, at around a quarter of respondents, were complaints regarding site reimbursement during the trial. The remaining responses were a variety of issues with the protocol. Based on this survey, and other difficulties I’ve encountered with site payments, I have implemented specialist payment systems in some trials, and always considered these vendors carefully for any clinical trial.

The Primary Benefits of a Site Payment System

In my experience, there are two primary benefits of a well-run site payment system. The first is that sites are happier, and therefore they may be more likely to enroll in your clinical trial. In particular, privately-owned clinical sites benefit from site payment efficiency, because financial considerations are highly relevant to their operations. Prompt payment from the sponsor can reduce the site burden; this occurs via a reduction of carried accounts receivables and reduced site overhead in the time and effort involved to invoice sponsors.

The second primary benefit is a significantly improved ability to track and control the budget for site payments; this reduces risks related to accruals and reconciliation, and can cut down on sponsor workload related to invoicing. The primary disadvantage to site payment systems is additional upfront cost and program design work. In order to analyze whether a site payment vendor is appropriate for a trial, a more detailed review of how site payments work is merited.

Generally, site payments are handled in one of three manners. The first is for the function to be outsourced to a CRO. The second is for the system to be handled internally, generally via direct invoicing of the sponsor by the clinical sites. The third is the use of a specialized vendor or vendor software. In the CRO administration model, a sponsor provides the CRO with a large pre-payment at the beginning of a trial. The sites then invoice the CRO, who pays them during the trial. Periodic additional payments are made by the sponsor to the CRO, and reconciliation is done either at the end of the study or on a periodic basis.

The Accrual and Reconciliation Process

The advantages of this model are that many CROs provide this service for low cost, or even free, included with general site management fees. It also removes the operational burden of handling invoices from a sponsor. Unfortunately, this method frequently carries significant disadvantages. CROs often do not consider this function an important or core expertise. Execution can be poor, leading to delays or errors in site payments. Furthermore, the large pre-payment ties up cash, which can be meaningful to smaller sponsors. Finally, there exists significant risk to small public companies surrounding the accrual and reconciliation process.

The accrual and reconciliation of site payments is an area of particularly large risk. I have been involved in trials where the CRO significantly underestimated the amount of site payments which had been made, leading to a large amount (~10 percent of total site payments) owed at the end of trial reconciliation. I have also been involved in trials where the CRO overestimated the amount, leading to a large repayment of fees (~15 percent of total site payments) to the sponsor at the end of trial. Public companies are required to estimate and accrue their expenses on an ongoing basis.

For smaller public sponsors, large adjustments coming after two or more years of operating a trial can be significant enough to risk forcing a restatement of earnings going back multiple quarters. Such restatements can lead to millions of dollars in accounting fees along with lost investor confidence. In each of the examples I experienced above, the CRO was a large and well-organized multi-national entity, which claimed to conduct regular internal tracking and reconciliation of the site payments made.

How to Successfully Administer Site Payments

The second method, internal administration, involves sites invoicing a sponsor directly. The sponsor then pays the sites via their finance department. The advantages of this system are that the sponsor retains direct control over their cash, with no prepayments. Financial tracking can be more accurate as the sponsor has full visibility into the payments made. The primary disadvantage is that a trial can generate hundreds or thousands of invoices. I believe the key risk to an internally administered system is the split functions between financial and clinical departments.

Activities in each require different skill sets and individuals may not have the expertise or may not prioritize the other function. Therefore, to successfully administer payments, and to accrue and pay correctly, financial personnel must have a solid knowledge of a clinical trials operational aspects, such as current enrollment, site contract terms, and missed or repeated procedures. Conversely, clinical trial personnel must have the time and skills to track the impact of trials on budgets, they must understand the accrual process and communicate extensively with the finance department.

Following discovery of an invoice error on a trial, I conducted a highly detailed audit of all site payments.  This was a small open label phase II trial with about 10 sites. Each month, the study generated invoices from about seven of those sites with between one and 150 line items per invoice. The audit showed a roughly 10 percent error rate in line items, accounting for about 2 percent of total amounts billed. The most common error was billing for procedures or visits not done, the second most common error was double billing for visits or procedures. Invoices frequently lagged the procedures by months, and the last invoice was received nearly two years after study close out. Looking back, I fear this error rate was similar in my other trials, but simply went unnoticed. CTMs rarely have the time to carefully review every invoice line item for repeats or omissions, and financial personnel rarely have the time or expertise to catch them.

What Role can Site Payment Providers Play?

Specialized site payment vendors have created software to specifically address the risks of invoicing and accruals highlighted above. Vendors with a strong presence in the field include Greenphire, Bioclinica, DrugDev, and Medidata. Technology changes rapidly so I would recommend exploring each of these vendor’s offerings. During implementation, time is spent integrating the payment system to the EDC while tailoring it to site contract terms. When data is entered into the EDC system per contractual terms, potential payments are automatically generated on a ‘per visit’ or ‘per procedure’ basis.

Additional invoiced costs, such as patient reimbursement or imaging are processed by vendor personnel into potential payments as well. These payments are then batched by the software and made available to the sponsor for internal review according to a defined process which can easily meet SOX (Sarbanes-Oxley) requirements. Once approved, payments are processed and paid from sponsor accounts, allowing them to retain control over the cash. Since payment is linked to the EDC data, double payments, missed payment, or invoicing errors are avoided.

The primary disadvantage of these systems is that they require some additional upfront work during study design, and they tend to be more expensive. Additionally, I have found that around half of academic sites are not motivated by site payment efficiency. Some refuse to move away from their invoicing practices, and others have strong divisions between the investigator and finance departments, so there is no real time or money saved for the site personnel.

Automation Likely More Appropriate for Small Sponsors

In conclusion, a specialized site payment vendor is likely to be most appropriate for small sponsors, public companies, and larger trials. These situations will benefit from lower risks to accruals and from a reduction in the burden of invoicing and administration of site payments. In particular, trials which include a large proportion of privately-owned sites may see improvement in site satisfaction and enrollment.

Large sponsors and CROs may also benefit significantly from the large amount of automation which can be achieved across multiple trials. The additional effort and cost of setting up these systems may not be worthwhile for medium or large companies with strong internal finance and clinical departments, or for small trials and small private companies where cost is the paramount concern.




  1. 2017 Veeva Unified Operations Survey; Presented Feb 2017 OCT West Conference, Shad Ayoub.
  2. Internal company survey