This can present real problems when physicians and the institutions where they work engage in clinical trial work for drug companies. Those services must be reimbursed at what HHS' Office of the Inspector General calls fair market value, or FMV.
A 2003 report from the OIG set some guidelines for payments from sponsors to investigators for research services. The report said these payments needed to be “legitimate, reasonable and necessary.” Defining and defending these has been the burden of both investigators and sponsors ever since.
A number of factors influence a fair market value assessment, including federal anti-kickback statutes, the False Claims Act, Stark Act, Sunshine Act and the Food, Drug and Cosmetic Act.
Many sponsors are turning to national databases to help identify FMV. These databases have shortcomings, including the inability to discriminate the level of effort associated with procedures or tasks, or the quality of the work. In other words, the database averages the negotiated contracts of sites that have been very successful at patient recruitment as well as sites that never enrolled a single study subject.
Additionally, sponsors and contract research organizations are increasingly relying on internal FMV committees to evaluate budgets from investigators. This has slowed the budgeting process and, as a result, the study startup time.
It is important for investigators to understand that the per-participant fees are not part of the overall budget. That is, the fee a sponsor pays for each study participant is intended to cover costs of visits, tests and other clinical care involved and related to the study—whatever is not already covered by Medicare or other payers.
Typical charges that must meet FMV include site administrative or study startup fees, study coordinator or research nurse's time to staff monitoring visits or site audits by FDA, case report completion or documenting events in the medical record.
Some of these line items have caused tension between sponsors and investigators, as some sponsors have suggested these activities are part of “the cost of doing business.” In fact, they are activities specifically directed at managing the clinical trial.
Other costs directly related to the clinical trial may include biologic or other waste disposal, medication storage or pharmacy charges, accounting fees for billing and managing the trial budget.
Additionally, there are startup costs that include communicating with the IRB, conducting a payer analysis, site selection visits, reviewing consent forms, attending investigator meetings, developing the budget and the contract, and so on.
While the purpose of FMV is to ensure compliance with federal and state regulations, some research sites run the risk of underestimating their budgets for fear of pushback from sponsors or CROs. The fact is that research sites that do not accurately budget their clinical trials risk losing money for their efforts.