Fair market value (FMV) can impact clinical trial budgets at research sites in many ways. In short, fair market value (FMV) is the selling price agreed upon by a buyer and seller, but in the context of clinical trials, FMV is used to determine the appropriate compensation for various goods and services provided by research sites. Sponsors use FMV during negotiations to standardize the range of costs and avoid federal anti-kickback statutes, which prohibit giving certain sites discounts over others, but FMV also applies to sites not giving discounts to certain sponsors over others in terms of covering their costs.
What common clinical trial budget items can be impacted by FMV?
- Investigator fees: Investigators, who oversee the conduct of the clinical trial, are often paid for their time and expertise. The FMV of investigator fees helps ensure that the compensation is fair and reasonable.
- Study coordinator salaries: Study coordinators play a crucial role in managing clinical trials, including patient recruitment, data collection, study coordination, and more, and FMV can help ensure they are compensated appropriately.
- Ancillary services: Most clinical trials require various ancillary services, such as laboratory testing, imaging, and data management, and the FMV of these services ensures that research sites are paid appropriately.
- Patient recruitment costs: Expenses related to patient recruitment activities, such as study advertising, pre-screening, screening, and enrollment. FMV considerations help determine fair compensation for these activities.
- Facilities and equipment: Research sites often need to provide specific facilities and equipment for conducting certain types of clinical trials, and the FMV of renting or purchasing these items ensure the costs are in line with market rates.
How does inflation impact FMV rates? Recently, we have seen more sponsors strictly follow FMV policies during budget negotiations due to inflation and their need to control costs. This situation can cause start-up delays for both sponsors and sites as they both attempt to negotiate the best possible budget for their needs.
What are tactics to cover site costs, even if they aren’t aligned with the sponsor’s FMV determination? First, have a clear process for determining your costs – whether you use a percentage of Medicare rates or a research fee schedule. Note that research fee schedules are costs already reduced from facility rates, so if a research fee schedule is used, sites can’t accept less than those rates without operating at a loss to participate. To ensure these bottom-line site costs are covered, have them documented – including standard administrative fees and CPT-coded items from the research fee schedule. The more detailed and transparent the documentation is, the more likely the sponsor will cover those costs, even if they are outside the sponsor’s pre-determined FMV costs.
By taking into account how fair market value impacts clinical trial budgets, research sites can ensure that the compensation they receive for certain services align with industry standards. This helps maintain transparency, fairness, and compliance with regulations governing clinical trials, while also ensuring research sites understand their financial viability when it comes to participating in certain clinical trials.
Looking for additional support on your clinical trial budgets? Connect with WCG today to learn more about how we can help your site maximize your clinical trial budgets.
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