Investigator Compensation: No One Size Fits All

Clinical Researcher—December 2021 (Volume 35, Issue 9)


Suzanne J. Rose, MS, PhD, CCRC, FACRP


Managing investigator payments is probably one of the most challenging aspects of conducting a clinical trial, but it seems that it is the best kept secret in our industry. It is the topic that generates the most interest when discussed with colleagues, but unlike other straightforward processes in our industry, the topic of investigator compensation is one that has guidelines but no specific steadfast rules to let us know if we are compensating appropriately or inappropriately. While there are several models that are discussed in the literature,{1–4} there is no clear consensus on which model is the best fit for each site.

The first stop in de-mystifying the conversation on investigator compensation is to identify and explain key operational and compliance factors for consideration, such as fair market value (FMV) and equity across specialties. Does one or can one size fit all? How much should we pay investigators for their work on a clinical trial and what laws govern investigator compensation so that we remain compliant? While it is important to understand the Stark Law and the Anti-Kickback Statue, and the exceptions and Safe Harbor that allow physician payments, these are excellently described elsewhere.{2}

We will therefore focus on FMV because amounts paid to investigators are considered part of their overall compensation amount and therefore subject to the FMV Guidelines. Importantly, both FMV and commercial reasonableness are important concepts in the Anti-Kickback Statute Safe Harbors and Stark exceptions.{2} In addition, as most principal investigators (PIs) are physicians, the American Medical Association (AMA) provides clear guidelines on managing conflicts of interest in the conduct of clinical trials, in that financial compensation should be at FMV and the rate of compensation per research participant should not change pursuant to the number of subjects enrolled by the physician.{5} Thus, the rate of payment for professional services should remain constant irrespective of the PI’s success enrolling or completing study subjects compared to their target.


The concept of FMV extends back 120 years{6} and is described in the Code of Federal Regulations as “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”{7} The Centers for Medicare and Medicare Services (CMS) defines market value as “the value in arm’s length transactions, consistent with the price an asset would bring as the result of bona fide bargaining between well-informed buyers and sellers who are not otherwise in a position to generate business for the other party.”{8} In 2003, FMV for research studies was first included in the Office of Inspector General (OIG) regulations stating “Payments for Research Services should be fair market value for legitimate, reasonable and necessary services.”{9}

However, even with the clear instructions above, the rules do not provide advice on determining the FMV, which puts sites at risk. If the investigator is paid above FMV, it can give the appearance that it would influence his or her decision to participate in the trial or to influence the outcome of the trial, thus placing the institution at risk from legal and regulatory perspectives. If PIs are paid below FMV, they may not be willing to participate fully or enroll research participants, which could impact relationships between sites and sponsors. At the end of the day, there is no perfect percentile that exists for FMV calculation, as FMV for an investigator truly depends on medical specialty, geography, and physician experience.{10}

However, the following are helpful hints for a site to stay in line with FMV:

  • Determine a pricing strategy with the billing team: Engage the billing team as partners in the pricing strategy. An important goal of any research study should be to properly compensate the hospital or private site for investigator time.
  • Update the fee schedules on a yearly basis: Variations in compensation rates should be monitored closely on an annual basis to ensure FMV is appropriate by region and specialty.
  • Provide full justifications for all fees charged in a clinical trials budget: The budget negotiation should not be a guessing game or contentious. Clearly outline all fees and justifications therein. Provide justifications up front, not when asked for them.
  • Engage internal support or external vendor to create research and/or administrative hourly compensation fee schedules: There are several firms that can assist in developing your organization’s internal compensation reference materials to be used in establishing the framework and market data consistent with your compensation philosophy related to physician research and/or administrative work effort. These firms can provide FMV payment (hourly rate) range recommendations for various physician specialties providing research and/or administrative services.

Finally, best practice is to create a FMV policy in writing to defend your site’s actions and to prove transparency. In addition, please remember that a physician’s “going rate” or past compensation does not necessarily constitute FMV; further, the values for administrative services most likely differ from those for clinical services. Therefore, it is important to engage a third-party vendor to clearly differentiate between research and/or administrative services.

PI Compensation Structure

Investigators can contribute to study in many ways,{1} and therefore the compensation should be fair, motivational, affordable, practical, legal, and agreeable.{3,4} To structure the investigator compensation model, we should include considerations for (clinical) relative value unit (RVU)–based services vs. administrative work in these models.

Relative Value Units (RVUs)

RVUs are measures constructed by Medicare to estimate productivity by calculating the relative level of physician time, skill, and expertise. Medicare relies on these measures to establish payment levels for physicians’ services which are then described by Current Procedural Terminology (CPT) codes. This compensation model is typical when a hospital also employs physician-investigators as clinicians, and they earn RVU credits when they perform clinical services with CPT codes that are part of the clinical trial.

It is helpful to utilize different terminology when incorporating research RVUs into an existing electronic medical record. To this end, we have established “research RVUs,” which are calculated per hospital policy as 1.5 times the Medicare rate across all specialties with one average RVU per visit type. At the end of the day, all RVUs end up in one bucket and look like regular RVUs. This way, regular patient visits are not seen as competition with research and the physicians are motivated to perform research in an existing RVU model.

When incorporating an RVU model into your investigator compensation program, it is important to remember that the model needs to account for research time with no corresponding CPT code. In addition, for study-specific oversight and research fees without CPT codes, the investigator cannot receive RVU credit and is paid according to FMV, as discussed previously.{2}

Compensation Models (External to RVUs)

Fixed Fee or Percentage: The site pays investigators a fixed fee or percentage for studies, regardless of their contributions. These options are simple to manage but difficult to assess if they accurately reflect the FMV of the investigators’ services.

Research Salary: At research sites where the investigators are employed by the site, investigators are paid a fixed salary for all their time spent working on clinical trials and all parties know the exact amount that will always be paid.

Hourly Wage: The site can compensate the investigator specialty-specific hourly rates for tracked time on a specific study along with activity performed. This can be seen as additional work by the investigator, who may balk at extra time spent on tracking their hours.

Fee for Service: The site compensates the investigator for specific services performed or time spent. This option is more time-consuming to administer, but strongly motivates investigators to perform the services they are contracted for.

Sub-Investigators: While the role of investigator is usually limited to a licensed physician, the sub-investigator role can be much more inclusive to include mid-level providers, such as physician assistants, nurse practitioners, and, at academic medical centers, residents and fellows. They play various roles in a study and are often essential for success of the trial. Fee for service typically works well for sub-investigators and can be tracked inside the budget, via a spreadsheet or clinical trial management system. It is important to understand any sub-investigator’s current payment structures inside the site or healthcare system and work with administration to ensure that salaried positions are capable of being compensated above and beyond their current salary structure, as well as being compensated for RVUs similar to their physician counterpart. At academic medical centers, payments to residents and fellows outside their salary will need to be carefully discussed and negotiated with the Graduate Medical Education Office and adhere to AMA guidelines.

Hybrid Model: In this model, a variety of the above options can be utilized. Fixed fees could be utilized for costs that are consistent from study to study, such as site initiation or monitoring visits. Fee for service would then be utilized for study procedures because they would be variable from visit to visit and study to study. An agreed-to administrative fee (in line with FMV) per visit type can also be included in this model along with research RVUs. The investigator then understands that compensation will be adjusted from study to study. This system is consistent with the financial success of the study while remaining within the regulatory guidelines.

Special considerations for all models:

  • If the investigator is billing a third party/subject for routine services that are in the protocol, the site cannot also compensate for those services, meaning the physician or site cannot get paid twice.
  • Ensure all investigators’ work and time efforts are documented clearly.
  • Written contracts and expectations are vital and should follow the guidelines set forth in The Personal Services and Management Contracts Safe Harbor or The Personal Service Exception.{2}

Regardless of the compensation structure, at the end of the day, it is important to remember that according to the tenets set forth by the International Council for Harmonization’s Good Clinical Practice guidelines and the U.S. Food and Drug Administration, bonuses, finder’s fees, or pay-for-performance to PIs based on the number of participants enrolled in or completing the trial are completely unacceptable.{11}

Compensation Models for Different Types of Physicians: Private vs. Hospital Based

Hospital and Medical Group Physicians

When working with physicians inside our system, the use of the centralized research office is required. We provide a consistent process to all studies so that all budgeting, contracting, regulatory approvals, and staffing issues are covered from study start-up to close-out to provide a concerted approach. All research funds are routed directly to the centralized research office with quarterly reimbursement made to research partnering physicians. We draft a master agreement with each physician and then utilize sub-orders to outline each study reimbursement and what payment schedule will be. The compensation follows a hybrid model approach including fixed fees, fee-for-service, RVU considerations, and administrative oversite fees.

We do have physician groups that request the money be distributed evenly across investigators or returned to their departments. Alternately, in departments where the studies might be supported by only one or two investigators, they opt to be paid individually. We always have these discussions up front, so they understand the options available to them. This model allows great flexibility amongst our physician groups, and they are able to feel engaged in the conversation from start to finish.

Private Physicians

When working with private physicians, understand that they have the desire to keep their patient population yet also are aware of competitive study enrollment. Private PIs can use their own clinical research staff (if they have them) or utilize our site staff if they lack adequate study support. In this scenario, a master agreement is drafted with each private physician group and then sub-orders are utilized to outline each study reimbursement and what the payment schedule will be. Compensation is provided for specific services performed by private physicians and their research staff following a fee-for-service model.

When we work with private PIs who provide all the staffing for studies yet require the use of the physical hospital space, we draft a facility use agreement where we can charge for management of study drug, supplies, equipment, and oversite of any research billing that may occur. Some physicians find us so helpful to work with that they have stopped performing research procedures at other hospitals, which brings in revenue for the hospital and procedures we might not have captured previously.


Investigator compensation is not a one-size-fits-all model. It includes an open and honest discussion with the investigator in addition to adhering to FMV and staying within ethical guidelines. Investigators should be motivated, but not incentivized, to perform clinical trials and view this engagement as a partnership to enhance research efforts to better the lives of our patients.


  1. Bowler A. 2017. Effort-Based Salary Support for PI Oversight Charges.
  2. Cramer P. 2016. Investigator Compensation: Motivation vs. Regulatory Compliance. Journal of Clinical Research Best Practices 12(9).
  3. Gibson M. 2016. Developing an Investigator Compensation Plan. Journal of Clinical Research Best Practices 12(9).
  4. Goldfarb NM. 2010. Investigator Compensation by the Research Site.
  5. AMA Code of Medical Ethics’ Opinions on Clinical Research. 2015. AMA Journal of Ethics 17(12):1136–41.
  6. Fair Market Value Conundrum: Solutions for Sponsors and Sites. Applied Clinical Trials.
  7. Electronic Code of Federal Regulations.
  8. In Public Health. Title 42. 2011. Office of the Federal Register, National Archives and Records Administration.
  9. 68 FR 23731—OIG Compliance Program Guidance for Pharmaceutical Manufacturers. Office of the Federal Register, National Archives and Records Administration.
  10. Goldfarb NM. 2019. Why Fair Market Value is Not One Number. See also
  11. Clinical Investigator Payment Best Practices. Clinical Leader.

Suzanne J. Rose, MS, PhD, CCRC, FACRP,
( is Director of the Office of Research at Stamford Health in Connecticut.