Establishing Fair Market Value of Compensation Arrangements
HealthCare Appraisers’ experienced compensation valuation team of professionals has the knowledge and skill set to help our clients navigate the complexities of the healthcare regulatory landscape. We provide the complete spectrum of compensation valuation services, and have dedicated teams of professionals for each of the numerous types of potential transactions to ensure the highest level of subject matter expertise, including relevant valuation as well as adherence to legal and regulatory issues.
HealthCare Appraisers approaches the valuation of physician compensation arrangements utilizing generally-accepted valuation standards tailored to conform to the unique context of the healthcare regulatory environment. Consistent with the standards for the professional practice of appraisal for businesses, HealthCare Appraisers considers the use of all three valuation approaches (i.e., the cost, market, and income approaches) in each assignment.
Our tested Approach
We then apply those particular approaches and methods that we conclude are meaningful and relevant, depending upon the specific facts and circumstances of the valuation and the available data. These valuation approaches are conformed, as required, to be in compliance with the definition of FMV as set forth by the Stark and Anti-Kickback statutes.
Specifically, our application of various valuation approaches does not give any consideration to the volume or value of potential referrals between the parties and does not rely on market values from parties not at arm’s length in reaching our conclusion of value. HealthCare Appraisers issues thousands of fair market value (FMV) opinions each year for virtually all types of physician compensation and service arrangements.
Compensation arrangements include:
- Employment arrangements
- On-call arrangements
- Telemedicine On-call arrangements
- Medical Director arrangements
- Collections guarantee / subsidy arrangements for hospital-based physicians
- Professional services arrangements (PSA)
- Service line management and co-management arrangements
- General management arrangements
- Clinical research/Clinical trial arrangements
- Marketing arrangements
- Physician recruitment arrangements
- Employee leasing arrangements
- Pay-for-performance arrangements
- Lithotripsy “per-click” arrangements
- Clinically integrated networks (CIN)
- GME affiliation arrangements
Upon completing our analyses, HealthCare Appraisers synthesizes the various indications of value from the market approach techniques utilized. This process involves taking into account the availability and quality of data for each technique and determining the indications that are most relevant for the determination of FMV based on the context of the arrangement and applicable healthcare regulations.
Every physician compensation arrangement is unique, and “cookie-cutter” valuation analyses fail to consider this characteristic. HealthCare Appraisers approaches the determination of fair market value and evaluation of commercial reasonableness by carefully analyzing the facts and circumstances surrounding every agreement to ensure that your financial arrangements remain compliant, yet meet the business objectives of both the healthcare organization and the physician.