Fair Market Value Services
The intermingling array of laws and regulations governing hospital/physician relationships – most notably the Anti-Kickback Statute, the Stark self-referral prohibitions, and the IRS private inurement prohibitions – have had the impact of calling into question almost any kind of hospital/physician financial arrangement. Although administrators rely on legal counsel to lead the development of these arrangements, fair market value (FMV) considerations often require detailed financial analyses that fall outside the legal realm of expertise. Therefore, it is becoming a common industry practice for legal counsel to seek outside expert opinions from consultants on these increasingly complex arrangements.
ECG has assisted numerous hospitals and health systems in overcoming these complex challenges. Our experience with hospital/physician financial arrangements, combined with our ability to effectively complete customized surveys and analyses, provides us with the knowledge and tools to assist your hospital and physicians in meeting FMV guidelines. Perhaps most importantly, the objective view we take in analyzing these arrangements may prevent you from going down a road that should not be traveled.
- Auditing hospital/physician arrangements and payments for compliance with relevant laws, regulations, and hospital policies.
- Developing and assessing hospital/physician call coverage arrangements.
- Analyzing compensation arrangements for hospital-employed physicians.
- Conducting FMV assessments of financial arrangements between hospitals and hospital-based specialists (e.g., anesthesiology, radiology, pathology, emergency medicine, hospitalist medicine).
- Providing FMV assessments of hospital/physician joint venture and leasing arrangements.
- Reviewing Professional Services Agreements.
Selected Projects
Conducting a FMV compensation study for clinical and anatomical pathology. Expand Minimize
ECG assisted a large health system with negotiations and a FMV analysis related to the provision of a multimillion-dollar contract for Part A and Part B pathology services. Our review included working with physicians and hospital executives to understand key issues related to the previous arrangement and conducting an analysis to determine a FMV range of payments for the services to be provided in the future. Once both sides came to an amicable agreement regarding key contract terms, we provided a FMV opinion letter to document the appropriateness of the final compensation package.
Developing an orthopedic trauma arrangement. Expand Minimize
ECG worked with a large medical center and an affiliated orthopedic group to determine an appropriate payment level for an orthopedic trauma service. The hospital engaged ECG to research orthopedic trauma services around the country and to develop a proposed payment system that met the goals of both organizations, as well as FMV principles. To complete the assignment, we interviewed orthopedic trauma experts, including many physicians suggested by medical group members, to determine best practices and typical financial provisions for such an arrangement. Based on our research, we developed a proposed stipend arrangement to compensate the physicians for providing the service.
Assessing a comprehensive call coverage compensation package. Expand Minimize
ECG worked with a large medical center in developing a comprehensive FMV assessment of the hospital’s proposed call coverage stipend plan for its panel of 18 different specialties. To complete the assessment, we utilized our methodology for assessing call coverage arrangements, which included compiling publicly available survey and ECG proprietary data, developing a benchmark for each specialty or specialty grouping, and comparing proposed payments to the relevant benchmarks. We applied this methodology and provided the client with a comprehensive report attesting to the FMV principles incorporated into the plan.
Developing a comprehensive emergency department call coverage payment system. Expand Minimize
ECG assisted a regional trauma center to develop a financially and clinically viable emergency department (ED)/trauma call coverage plan that met the goals of both the hospital and the physicians. Working with a call coverage advisory committee composed of physicians and administrators to develop viable solutions; ECG helped analyze ED call data to determine the frequency of coverage activity for each specialty, as well as the level of uncompensated care that physicians may be providing as a result of call coverage. From this research, we developed a FMV call coverage funding model that examined the impact of the various funding options available.
Performing a comprehensive review of hospital/physician financial arrangements at a major health system. Expand Minimize
ECG assisted a not-for-profit health system with the audit of all of its hospital/physician arrangements at nine hospitals to ensure compliance with the Anti-Kickback Statute, Stark law, and tax exemption-related laws. Working under the auspices of the client’s external legal counsel, ECG gathered, organized, and evaluated all contracts and payments, and documentation of the contracts and payments, between the hospitals and physicians. Our review concluded with detailed matching of payments to contracts and an analysis of each arrangement’s consistency with relevant laws.
