NIH Grants Policy Statement
Part II: Terms and Conditions of NIH Grant Awards
Subpart B: Terms and Conditions for Specific Types of Grants, Grantees, and Activities – File 11 of 11
PATIENT CARE COSTS
This chapter provides NIH policy on the determination and
reimbursement of research patient care costs under grants. This general policy
is intended to be applied in conjunction with the requirements of 45 CFR part
74, Appendix E, Principles for Determining Costs Applicable to Research and
Development under Grants and Contracts with Hospitals. In addition, specific
NIH programs may have additional or alternative requirements with which an
applicant/grantee must comply.
Research Patient Care Costs. The costs of routine and ancillary services provided by
hospitals to individuals participating in research programs. The costs
of these services normally are assigned to specific research projects through
the development and application of research patient care rates or amounts
(hereafter "rates"). Research patient care costs do not include: (1) the
otherwise allowable items of personal expense reimbursement, such as patient
travel or subsistence, consulting physician fees, or any other direct payments
related to all classes of individuals, including inpatients, outpatients,
subjects, volunteers, and donors, (2) costs of ancillary tests performed in
facilities outside the hospital on a fee-for-service basis (e.g., in an
independent, privately owned laboratory) or laboratory tests performed at a
medical school/university not associated with a hospital routine or ancillary
service , (3) recruitment or retention fees or (4) the data management or
statistical analysis of clinical research results.
Hospital. Includes all types of medical, psychiatric, and dental facilities,
such as clinics, infirmaries, and sanatoria.
Research Patients. Inpatient and outpatient subjects, volunteers, or donors
participating in a research protocol.
Services. Regular room services, minor
medical and surgical supplies, and the use of equipment and facilities, for which
a separate charge is not customarily made.
Services. Those special services for which charges are
customarily made in addition to routine services, e.g., x-ray, operating room,
laboratory, pharmacy, blood bank, and pathology.
Outpatient Services. Services rendered to subjects/volunteers/donors who are not hospitalized.
Usual Patient Care. Items and services (routine and ancillary) ordinarily furnished in the
treatment of patients by providers of patient care under the supervision of the
physician or other responsible health professional. Such items or services may
be diagnostic, therapeutic, rehabilitative, medical, psychiatric, or any other
related professional health services. These expenses are for care that would
have been incurred even if the research study did not exist. The patient and/or
third-party insurance generally will provide for reimbursement of charges for
"usual patient care" as opposed to not reimbursing those charges generated
solely because of participation in a research protocol.
Discrete Centers. Groups of beds that have been set aside for occupancy by research patients and
are physically separated from other hospital beds in an environment that
normally permits an ascertainable allocation of costs associated with the space
they occupy and the service needs they generate.
Scatter Beds. Beds assigned to research
patients based on availability. These beds are not physically separate from nonresearch beds. Scatter beds are geographically dispersed
among all the beds available for use in the hospital and are not usually
distinguishable in terms of services or costs from other general service beds within the hospital.
Cost-Finding Process. The technique of apportioning or allocating the costs of the
non-revenue-producing cost centers to each other and to the revenue-producing
centers on the basis of the statistical data that measure the amount of service
rendered by each center to other centers.
NIH provides funds for research patient care costs under
grants and cooperative agreements. Research patients may receive routine
services as inpatients or ancillary services as either inpatient or outpatient
subjects/volunteers/donors. In order to receive reimbursement for research
patient care costs, any hospital that, as a direct recipient of NIH funds,
expects to incur more than $100,000 in patient care costs in any single budget
period on a single NIH grant must either have in place or take steps to
negotiate a research patient care rate agreement with the cognizant DCA office.
These rates must be shown in all requests and/or claims for reimbursement of
research patient care costs. Hospital grantees that expect to incur $100,000 or
less in research patient care costs per budget period on a single NIH grant and
patient care for all consortium participants/contractors under grants no matter
the dollar figure are subject to the requirements specified in the subsection
on Special Procedures for Certain Hospitals below. Failure to negotiate a research patient care rate with DCA when required
may result in the disallowance of all research patient care costs charged to a
19.4 Allowable Costs
The type of patient and services received are the
determining factors for allowing research patient care costs as charges to NIH
grants. If the patient is receiving service or care that neither differs from
usual patient care nor results in expenses greater than those that would have
been incurred if the study had not existed, then the patient is considered to
be hospitalized for usual care purposes and the grant will generally not
support the costs. When the research extends the period of hospitalization
beyond that ordinarily required for usual care, or imposes procedures, tests or
services beyond usual care, whether in an inpatient or outpatient setting, the
grant may pay the additional costs. The grantee must decide whether, in fact,
the hospitalization period, the tests, or the services have been extended
beyond or added to what would ordinarily have been expected, and to what
extent. Patient care costs for individuals who are receiving accepted treatment
according to standard regimens would not ordinarily be acceptable charges to an
NIH grant. Similarly, in certain kinds of clinical trials where accepted
treatments are compared against new therapies, research patient care costs
generally may be charged to a grant only insofar as they are measurements or
services above and beyond those that constitute usual patient care and are
specified by the study protocol. Acceptable exceptions are listed below.
NIH funds may be used to pay all costs (whether usual care
costs or research care costs) for the entire period of hospitalization or
research tests or services for individuals who would not have been hospitalized
or received such tests or services except for their participation in the
research study. Any such exceptions should be documented in the grantee's
records. These individuals may include the following:
- Volunteers to whom no health advantages may be
expected to accrue as a result of the hospitalization. Examples would be normal
controls for metabolic or other studies; people with genetic or certain
abnormalities of interest to the investigator; healthy individuals
participating in a clinical trial, for example a vaccine trial; and sick people
brought to the hospital solely for studies when they otherwise would not
- Volunteers who are sick and of research
importance to the protocol but economically unable or without funds available
to them through a responsible third party to pay hospitalization expenses. This
includes patients for whom some third-party payer, such as a city, county, or
State government, might pay hospitalization expenses in some other hospital but
has no responsibility to pay in the hospital in which the approved clinical
research is being conducted.
- Volunteers of research importance who are
unwilling to spend their own money or use their hospital plan coverage at that
particular time. (Fear of more urgent need in the future for both personal
funds and health insurance might be one reason for the patient's reluctance to
participate in the study.) The investigator has a special responsibility in
making the decision to include patients in this group with full charges to the
grant, since NIH expects the patient and/or third party to pay the total costs
of usual care. However, in exceptional circumstances, the investigator may
decide to pay the total expenses for hospitalization, research services, or
tests from the grant if this is required to secure timely cooperation of a
valuable study patient not otherwise available.
19.4.1 Computing Research Patient Care Costs
Research patient care costs, whether expressed as a rate or
an amount, shall be computed in an amount consistent with the principles and
procedures used by the Medicare program for determining the portion of Medicare
reimbursement based on reasonable costs. Separate cost centers must be
established for each discrete bed unit for purposes of allocating or
distributing allowable routine costs to the discrete unit.
When provisional rates are used as the basis for award of
research patient care costs, the amount awarded shall constitute the maximum
amount that the NIH awarding IC is obligated to reimburse the grantee for such
costs. Provisional rates must be adjusted if a lower final rate is negotiated.
19.4.2 Facilities and Administrative Costs
F&A costs should not be paid on any cost component
representing the cost of research patient care activities. Research patient
care rates (routine and ancillary) include F&A costs related to
"hospital-type" employees (nurses, medical technicians, and similar personnel)
supported as a direct cost under a grant. Therefore, to preclude
over-recoveries of costs similar to these F&A costs, salaries and wages of
all "hospital-type" employees working on the grant must be excluded from the
salary and wage (S&W) base used to claim F&A costs. Related fringe
benefits also should be excluded if such costs are part of the S&W base. If
a "total-direct-costs" base is used to compute and claim F&A costs, the
above-mentioned "hospital-type" salaries also must be excluded from the base as
well as any other base costs chargeable to the grant through the application of
a research patient care rate.
If the grant or a consortium agreement/contract under a
grant provides funding exclusively for research patient care activities, no
F&A costs normally will be allowed as a separate cost element since all
allocable F&A costs will be accounted for in the routine or ancillary
activity costs contained in research patient care rates.
Although foreign organizations are not prohibited from
requesting research patient care costs, all F&A expenses must be excluded
from the charges to the grant.
Procedures for Certain Hospitals
If a grantee does not meet the threshold for negotiation of
a research patient care rate agreement with DCA in a given budget period, as
specified under Policy in this chapter, but has a
currently negotiated research patient care rate, that rate will be used in
awarding and reimbursing research patient care costs, regardless of the amount
that the grantee expects to incur. In all other cases, the grantee will be
reimbursed at a rate not to exceed the lesser of actual research patient care
costs or the rate included in its Medicare cost report.
Participants/Contractors under Grants
If a hospital incurring research patient care costs is not
the grantee, the grantee will be responsible for establishing the rate or
amount that will be reimbursed for such costs unless the hospital also is a
direct recipient of other HHS awards and in that capacity has established a
research patient care rate with DCA.
If a participating hospital expects to incur more than
$100,000 in research patient care costs as specified under Policy in this chapter, the grantee must negotiate a rate for that hospital unless the
relationship between the grantee and the hospital is considered
"less-than-arms-length." In this case, the grantee should contact the GMO to
determine whether DCA should negotiate the rate.
If a participating hospital expects to incur $100,000 or
less in research patient care costs (as provided under Policy in this chapter), the grantee will use the lesser of actual costs or the rate
in the hospital's Medicare cost report as the basis for determining
reimbursement. For purposes of this paragraph, the grantee will apply the
thresholds to each hospital individually.
19.4.4 Financial Responsibilities
If the costs of patient care
are funded by the grant, and whether those costs are classified as usual
patient care or research patient care, the amount recovered from third parties
must be credited to the grant. However, patient charges must be adjusted for
both routine services and ancillaries prior to applying the third-party
recoveries. The grantee is obligated to pursue recovery to the fullest extent
possible and should be able to document those efforts. An example of such an
If the standard fee schedule
charge for a CT scan is $500, the negotiated research patient care agreement
rate is 75 percent, and third-party insurance pays $300, the maximum amount
that may be charged to the NIH grant is $75, based on the following
Standard Fee Schedule X
(multiplied by) Negotiated Rate = Cost -(minus) Insurance = Maximum Charge to
$500 x .75 =
$375 - $300 = $75
In those instances when the
grantee determines that the balance of the patient's bill may be charged to the
grant (see Allowable Costs in this chapter),
the total bill must be adjusted to cost before applying any third-party recoveries.
The remaining balance of allowable costs may then be charged to the grant.
In certain circumstances, funds
may be awarded that support tests specifically developed for research purposes
that are subsequently billed to third parties. In such cases, funds recovered
from third parties must be credited to the grant account.
19.5 Program Requirements
An individual NIH IC/program may
adopt special implementing procedures consistent with this section to meet its
own specific needs.
19.6 Post-Award Requirements
Post-award rebudgeting into or out
of the patient care costs category is likely to be considered a change in scope
and require prior approval of the NIH awarding IC (see Administrative Requirements—Prior Approval Requirements—Change in Scope in IIA).