There are a number of arrangements that require not only an opinion of the FMV rate in terms of dollars but also an estimate of time, cost, or some other element.  For example, the FMV for arrangements such as MSAs, marketing services, and specimen collection services are normally calculated using a “cost plus mark-up” model.  In these cases, the appraiser can opine to the fair market mark-up on costs, but determining the fair and reasonable amount of expenses is the other critical element to ensure FMV compliance.  HVG is seeing this often with specimen collection arrangements, where the actual costs incurred in providing specimen collection services is scrutinized. To ensure full FMV compliance, a commercial reasonableness opinion related to the fair and/or necessary costs in providing the specified services may also be necessary.  Other arrangements, such as medical directorships, phlebotomy, supervision, or other clinical type services, require an estimate of time in addition to the FMV hourly rate for the clinician providing the service.    In these arrangements, an appraiser is likely not qualified to opine to the reasonable and necessary amount of time needed to provide a particular clinical service effectively.  These arrangements may require a time estimate by the client or someone with the proper clinical knowledge.

In summary, the FMV dollar amount is only one part of the equation.  The other variable of the equation is either cost or time.  This means accurate accounting, good record keeping, and time logs are very important