What to Watch Out for When Implementing Billing Systems for CROs
If you’ve learned anything from our series on how digital systems manage sales cycles for CROs, it’s that there are a lot of hurdles to keep in mind. CRM systems struggle to account for complex customer types and systems integrations, complicated pricing models can stump CPQ systems, and out-of-the-box CLM systems can fail to account for how often clinical research contracts change. Considering this, it should be no surprise that billing and invoicing can take these complexities up to eleven.
Contract research organizations not only have to adhere to contracted pricing terms, but they also have countless billing options to choose from, funding sources like insurance and Medicare to deal with, and all while needing to maintain 100% compliance with government regulations. In an industry focusing so heavily on healthcare and human life, it’s crucial to implement a system that lives up to these high standards.
Here are some of the biggest things for CROs to consider when implementing a billing and invoicing platform:
Countless billing options
We’ve discussed how complex CRO contracts and pricing are, but the complexity of this process comes to a head when you consider the number of billing options available to CROs. A clinical trial’s mechanisms are intricate, with many moving pieces that can be difficult to quantify on invoices.
While each clinical research organization has its unique process, most billing strategies follow one of the following models:
CROs may use different billing methods for different clients based on client preference. They might also combine billing methods; for example, charging hourly for labor and per-unit for deliverables. Many invoice for an up-front fee before the project start, in addition to labor and services.
Billing management programs like Salesforce and Conga rarely provide the necessary functionality for such complex billing out of the box. Customizing an implementation to produce accurate invoices efficiently can take weeks or even months.
Insurance and Medicare charges
In this series, we’ve tried to approach contract research from an international lens. Most of the struggles CROs encounter when implementing digital platforms are the same whether you conduct research in Ottawa or Lilongwe. But when it comes to billing for clinical trials, you can’t ignore the United States’ effect on the industry.
The United States hosts over a third of the world’s clinical trials and co-hosts trials with another 5%, meaning almost 40% of all clinical trials must deal with the American insurance system and Medicare. Since the Medicare insurance system is funded directly by the U.S. government, it has strict rules and regulations on how it will pay for things; Medicare will only pay certain costs of a clinical trial and is prohibited from paying liabilities that are the responsibility of another insurer.
Failure to structure the reimbursement plan for a study can result in loss of the right to reimbursement and if the problem rises to the level of a false claim, it can result in significant fines and penalties. — Kristofer Munroe, MedTech Intelligence
If a contract research organization makes a mistake when billing Medicare, it can escalate to fines and penalties. These not only cost the company fiscally but can also damage its image and reputation. Incorrect liability claims can even damage the organization’s ability to legally invoice actual liable parties, leading to significant losses.
Since the Medicare system is so complex, it often seems easier to generate invoices manually to avoid digital errors. This takes a lot of time, however, and expands the opportunities for human error. Using digital systems to bill Medicare can be incredibly helpful, but it takes hard work and attention to detail to configure these systems correctly.
International and institutional compliance
Medicare is complicated, but it has a bit of a silver lining: it ensures compliance. By ensuring their clinical trial billing is compliant with Medicare and Medicaid regulations, CROs can be confident that their billing is compliant with almost any other U.S. sponsor, whether it be a university, a pharmaceutical company, or a nonprofit organization. But complications still arise when CROs conduct research across international borders.
Take a company like Pharmaceutical Product Development, for example. PPD’s international headquarters is based in Morrisville, NC, USA, but their contract research isn’t limited to the United States. They have offices in cities of dozens of countries: Cambridge, Beijing, Hyderabad, Melbourne, and Mexico City, among others. This means that their billing system must account for regulations by:
Most of the time, trials themselves will be limited to one country, limiting the number of regulatory bodies per invoice. But if the clinical research involves pharmaceuticals or medical devices intended for use in other countries, it may be expedient to adhere to their research regulations as well.
Even when trials only have one state’s regulations to account for invoicing, digital systems must still be customized for all necessary use cases. Even simple contract research is still contract research: the organization or sponsor contracting the CRO may have its own institutional rules and regulations. This means that not only should digital systems be able to automate recurring processes, they must also have the flexibility to account for specific institutional preferences.
Having a good billing and invoicing system in place will improve a company’s workflow across the board. There’s nothing like clicking a button and getting a perfectly calculated and compliant invoice in seconds. Good systems can improve efficiency, ensure compliance, and reduce stress for everyone involved in the billing process—but only if they’re customized correctly.
A digital billing system can reduce stress throughout a contract research organization, but it’s important to consider potential obstacles when planning an implementation. To learn more about how CommerceCX helps CROs manage proposal generation, contract management, pricing clinical trials, and more, check out our other articles on the Quote-to-Cash process for contract research organizations.