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Table of Contents

Lead Story

The squeeze in merchant cash advance

News

Industry Update

The VeriFone, Heartland rift

CIT seeks smooth reorganization

Optimizing online holiday sales

LINC-ed up in Sacramento

Remote debit gets a voice

Features

Research Rundown

Taking top strategies to market

Selling Prepaid

Prepaid in brief

Clinical trial payments on plastic

Rebate chic

Retailer-centric PM lands AmEx deal

Views

Regulatory reforms loom

Patti Murphy
The Takoma Group

Education

Street SmartsSM:
How much do you factor in price?

Jon Perry and Vanessa Lang
888QuikRate.com

Timing is everything

Bob Schoenbauer
Capitol Payment Systems Inc.

Hazards of chargeback monitoring

Ken Musante
Moneris Solutions

Protect your investment through non-competition agreements

Sarah Weston
Jaffe, Raitt, Heuer & Weiss PC

Scrooge, a lesson in leadership

Dale S. Laszig
DSL Direct LLC

How to grow your merchant portfolio

Jeffrey I. Shavitz
Charge Card Systems Inc.

Company Profile

LIFT Network

New Products

Assistance with self-assessment

ExpertPCI
Panoptic Security Inc.

NFC-enabling sticker

Tetherball Tag
ViVOtech Inc., Tetherball LLC

Inspiration

Give props to the POS

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

November 23, 2009  •  Issue 09:11:02

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SP
Clinical trial payments on plastic

At the Association of Financial Professionals' Annual Conference held in San Francisco in early October 2009, one well-attended presentation concerned how a university and affiliated medical center implemented an in-house prepaid card solution to pay its clinical trial participants.

Before 2007, the University of Pittsburgh and the University of Pittsburgh Medical Center paid or reimbursed individuals who took part in clinical trials through petty cash funds, checks, gift certificates and coupons. But the process had become cumbersome.

With hundreds of researchers carrying out studies on thousands of patients, cutting and mailing paper checks that would reach recipients "in a few weeks" lacked efficiency, said Linda Zang, Assistant Treasurer at UPMC. "They really wanted to be able to hand the payment out at the time the interview was concluded," she added.

From the administrative perspective, petty cash funds were hard to manage and refresh, said George Cerminara, Project Manager, Finance, for the University of Pittsburgh.

Payroll plus

The solution was to go electronic, but that direction was not without complexity. Zang said the university and UPMC, while "tied at the hip when it comes to doing clinical research," are two distinct organizations with separate management structures, accounting systems and payables systems.

The university reviewed the payment processes of its peer research university group -which included most of the top 20 medical research institutions in the United States - and discovered that not one university had implemented an electronic solution, or knew of where to look for one. Their universal response: "If you find something, let us know."

The university then contacted payroll card providers, but to no avail. Processors and program managers didn't offer a solution that satisfied the organizations' specific requirements, such as 1099 Internal Revenue Service reporting and the ability to send files to accounts payable departments to record payments, according to Zang.

"They are certainly interested in providing you with a card processing service with the ability to make a payment to somebody," Cerminara said. "But that's where it stops."

"What we needed beyond payroll cards was a whole suite of accounting and control processes," Zang added. "If you are managing hundreds of studies, you need to be able to assign every card that you are paying to an individual. You need to be able to charge fees for the card cost and load cost to the study. If the study exceeds its budget, you need to shut off future payments.

"And if you're running hundreds of studies, and you don't want to do manual accounting, you need a whole new infrastructure of software that lets you do this in an automated fashion."

The only alternative was for Pitt and UPMC to develop their own system internally. What the organizations' information technology staff came up with was dubbed WePay. Patients are issued anonymous, instant issue, open-loop, reloadable, MasterCard Worldwide-branded prepaid debit cards, and as such have multiple options to allow study participants to redeem the cards' value, Cerminara said.

Hurdles

The main challenge in developing the software was in meeting the compliance obligations of the USA Patriot Act of 2001 and the Health Insurance Portability and Accountability Act (HIPAA) - two laws that Zang believes are in conflict as they affect the university's ability to recruit and pay volunteers for research studies.

Whereas the Patriot Act mandates "know your customer" policies, such as requiring identification and background information like Social Security numbers and residence addresses, HIPAA is designed to protect patients' private information on a need to know basis.

Zang explained that the Patriot Act requires multiple paper documents to positively "ID" an individual to be able to pay them, while established research protocols and HIPAA mandate the individual's privacy must be respected.

"If we cannot offer to pay volunteers for their participation because they don't have the required identity or financial documents, then we are impaired in our ability to conduct the studies," she said. While Zang said the dual compliance issues have been solved, Payment Card Industry Data Security Standard compliance has been an ongoing burden. "We're working on it," she said.

Trial victory

But, overall, Zang and Cerminara believe WePay is a success. In 2008, Pitt and UPMC conducted over 3,300 clinical trials, with Pitt accounting for $672 million in research spending and UPMC $88.6 million. Over 5,000 payments are made monthly to over 1,000 patients, Cerminara said. Those numbers are expected to increase in the coming months and years.


For more stories from SellingPrepaid E-Magazine, as well as breaking news and forums devoted to the prepaid sphere, please visit SellingPrePaid.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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