Clause 9.4 - Arrangements with Healthcare Professionals acting as Consultants

Clause 9.4 - Arrangements with Healthcare Professionals acting as Consultants

We have engaged a healthcare professional (HCP) as a consultant to travel overseas to facilitate a two-day company training session. Can the HCP arrive the night before the training session and leave the day after the training session or would this be a prohibited side trip?

If the travel arrangement is linked to the proper performance of the consultancy services, such as allowing the consultant reasonable rest before performing the consultancy services, then it is permitted within The Code. Companies need to assess what is reasonable in the circumstances of each consulting arrangement.

Can we engage a HCP as a consultant to speak at a third party educational conference and pay their associated expenses?

Companies cannot make direct payments to HCPs to speak at third party educational conferences. They are only allowed to provide sponsorship to a conference organiser, which can then be used to provide support for a speaker as part of the expenses for the conference.

We have engaged a HCP from Sydney as a consultant to speak at a company training event in Brisbane. The HCP has asked us to facilitate a ‘side trip’ after the consultancy so she can have a weekend in Byron Bay before flying back to Sydney. Is this permitted?

No. The Code allows for the provision of reasonable and actual expenses incurred by a consultant in carrying out the engagement. It does not permit companies to facilitate a side trip for any other purpose, even if the side trip is at no further cost to the company.

The Code states that a Company may pay the Healthcare Professional reasonable compensation for performing services as a Consultant. Further it states that the compensation must be consistent with fair market value for the services provided. How can a Company determine fair market value?

Fair-market-value is the value of the specified consultancy services which would be paid by the Member Company to the consultant, each dealing at arm’s length in an open and unrestricted market, and when neither party is under any compulsion to buy or sell, and both parties have reasonable knowledge of the relevant facts. A Member Company should use objective and verifiable criteria to determine fair market value and should ensure this is documented. Some criteria that Members make take into consideration when determining fair market value include: the consultant’s qualifications, expertise, clinical experience, presentation skills and the actual services to be provided. Some state health departments publish hourly rates to use as a comparative guidance.

How can a Company establish “fair market value”?

There are different valuation methods that may be used to establish fair market value. In all instances, a Company should use objective, verifiable criteria. The method or methods used by a Company should be documented.

What is meant by fair market value in the context of consulting arrangements?

Fair market value is the value of the specified consultancy services which would be paid by the Member Company to the consultant, each dealing at arm’s length in an open and unrestricted market, and when neither party is under any compulsion to buy or sell, and both parties have reasonable knowledge of the relevant facts.

How should Member Companies determine fair market value for a service?

A Member Company must be able to demonstrate internal methodology to determine fair market value. Amongst other matters this shall take account of the consultant’s qualifications, expertise and experience as well as the actual services to be provided to the Member Company.

The Code states that a Company may pay the Healthcare Professional reasonable compensation for performing services as a Consultant. Further it states that the compensation must be consistent with fair market value for the services provided. How can a Company determine fair market value?

Fair-market-value is the value of the specified consultancy services which would be paid by the Member Company to the consultant, each dealing at arm’s length in an open and unrestricted market, and when neither party is under any compulsion to buy or sell, and both parties have reasonable knowledge of the relevant facts. A Member Company should use objective and verifiable criteria to determine fair market value and should ensure this is documented. Some criteria that Members make take into consideration when determining fair market value include: the consultant’s qualifications, expertise, clinical experience, presentation skills and the actual services to be provided. Some state health departments publish hourly rates to use as a comparative guidance.