With Anti-Kickback and Self-Referral Laws WEDNESDAY, NOVEMBER 30, - - PowerPoint PPT Presentation

Fair Market Value in Hospital and Physician Transactions: Complying With Anti-Kickback and Self-Referral Laws

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Presenting a live 90-minute webinar with interactive Q&A Albert D. (Chip) Hutzler, Partner, HealthCare Appraisers, Delray Beach, Fla. Albert W. Shay, Partner, Morgan Lewis & Bockius, Washington, D.C.

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Fair Market Value in Hospital & Physician Transactions:

Meeting FMV Requirements in Federal Anti-Kickback and Self-Referral

Presented by: Chip Hutzler, JD, MBA, CVA | Partner HealthCare Appraisers, Inc. Albert Shay, Esq.| Partner Morgan Lewis & Bockius, LLP November 30, 2016

Presentation Overview

• Discussion of Legal Landscape
• Common Hospital/Physician Arrangements and FMV

Approaches

• FMV Pitfalls/Commercial Reasonable Issues
• Recent Developments

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Legal Issues to Consider

• Anti-Kickback Statute - 42 U.S.C. §1320a-7b(b)
• The federal Physician Self-Referral Prohibition

42 U.S.C. §1395nn

• Internal Revenue Code prohibition on Private Benefit/

Private Inurement

• Civil Monetary Penalty Laws - 42 U.S.C. §1320a-7q(b)
• False Claims Act - 31 U.S.C. §§ 3729-3731

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The 3 “How’s”

• When analyzing physician compensation, at least

three tests are involved:

• How Much?
• Is the compensation within the range of fair market value?
• How Calculated?
• Is the compensation based on the volume or value of the

physician’s referrals?

• How Come?
• Is the compensation commercially reasonable?
• Are these tests separate?

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How Much? Fair Market Value

• Statutory Definition of Fair Market Value:
• “The term ‘fair market value’ means the value in arms length transactions, consistent with

the general market value, . . .” 42 USC § 1395nn(h)(3)

• Regulatory Definition of Fair Market Value
• “Fair market value means the value in arm's-length transactions, consistent with the

general market value. ‘General market value’ means the price that an asset would bring as the result of bona fide bargaining between well-informed buyers and sellers who are not

• therwise in a position to generate business for the other party, or the compensation that

would be included in a service agreement as the result of bona fide bargaining between well-informed parties to the agreement who are not otherwise in a position to generate business for the other party, on the date of acquisition of the asset or at the time of the service agreement . . . .” 42 CFR § 411.351

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How Calculated? Volume or Value of Referrals

• How is Compensation Determined?
• Is the Compensation calculated based on the volume or value of the physician’s referrals?
• Are referrals taken into account in determining compensation?
• Requirement of many compensation exceptions:
• “The compensation to be paid … is set in advance, does not exceed [FMV], …

and is not determined in a manner that takes into account the volume or value

• f any referrals or other business generated between the parties.”
• Definition of an Indirect Compensation Arrangement (second prong):
• “The referring physician … receives aggregate compensation … that varies with,
• r takes into account, the volume or value of referrals or other business

generated by the referring physician ….”

• To fit within the Indirect Compensation Arrangement Exception, compensation

may not be based on the volume or value of referrals.

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How Come? Commercial Reasonableness

• Many Stark exceptions include a commercial reasonableness requirement
• the arrangement must be “commercially reasonable even if no referrals

were made between the parties”

• Neither the statute nor the regulations define “commercial

reasonableness”

• Justice Stewart: I know it when I see it
• Two questions:
• Why did the parties enter into the arrangement?
• Would the terms of the arrangement be different in the absence of any

referrals between the parties?

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How Come? Commercial Reasonableness

• CMS Commentary
• The “arrangement appears to be a sensible, prudent business agreement, from

the perspective of the particular parties involved, even in the absence of any potential referrals.” 63 Fed. Reg. 1659, 1700

• The arrangement makes “commercial sense if entered into by a reasonable

entity of similar type and size and a reasonable physician … of similar scope and specialty, even if there were no potential referrals.” 69 Fed. Reg. 16054, 16093

• Is it commercially reasonable for a hospital to pay a physician more

than the gross revenues derived from the physician’s professional services?

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The Antikickback Statute (AKS)

• 42 U.S.C. §1320a-7b(b)
• Prohibits the offer or payment of any remuneration to any

person to induce that person to

• refer an individual to a person for the provision of any item or service;
• r
• purchase, order, or arrange for, or recommend purchasing, ordering,
• r arranging for, any service, facility or item

for which payment may be made, in whole or in part, under any Federal health care program.

• Statutory prohibitions apply to both sides of the arrangement
• AKS applies to all health care providers and anyone else who

can influence referrals

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AKS (cont.)

• Intent-based statute
• Cannot violate the statute without acting “knowingly and willfully”

with intent to induce or reward referrals.

• Actual knowledge or specific intent — “With respect to violations of

this section, a person need not have actual knowledge of this section

• r specific intent to commit a violation of this section.” ACA §6402(h)
• Felony statute
• Fines
• Imprisonment
• A claim resulting for items/services resulting from violation of

the AKS constitutes a false or fraudulent claim under the FCA. ACA §6402(f).

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AKS Exceptions and Safe Harbors

• AKS statute includes exceptions and OIG created

regulatory “safe harbors”

• Very narrowly defined
• Must satisfy ALL criteria to have protection
• If arrangement falls within safe harbor, OIG claims the

arrangement is immune from prosecution, regardless of intent

• Fitting a financial relationship into a safe harbor is not

required; arrangements that do not meet the requirements of a safe harbor are not presumptively illegal.

• Advisory Opinion Process available

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Physician Self-Referral (“Stark”) Law

• 42 U.S.C. §1395nn
• Statute prohibits physicians from engaging in “financial

relationships” (i.e., compensation arrangements and ownership interests) with entities to whom they refer patients for Designated Health Services.

• If physician engages in a prohibited financial relationship with

entity to which he refers patients for DHS, then the entity is prohibited from billing Medicare for DHS provided to those patients and Medicare is prohibited from paying for such

• services. (42 U.S.C. §1395nn(a)(1)(B))
• HHS will not pay Medicaid programs for services violating Stark.

(42 U.S.C. §1396b(s))

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Stark Law (cont.)

• Statute and regulations create exceptions permitting

certain narrowly-defined financial relationships.

• Proscriptive statute – if an arrangement between a

physician and DHS entity implicates the statute, then the arrangement must fit within an exception.

• Strict liability statute – intent of the parties is irrelevant for

purposes of determining whether the statute is violated.

• Both statute and regulations set forth various exceptions

and must satisfy ALL the requirements of an exception to have protection.

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Stark Law (cont.)

• Government has taken the position that full value of

claims submitted must be repaid

(42 U.S.C. §1395nn(g)(1)

• Stark Law Self-Disclosure Protocol required by ACA

provides alternative for resolution purposes

• Often boot-strapped under FCA
• Civil monetary penalties and exclusion

(42 U.S.C. §1395nn(g)(3)-(4))

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AKS vs. Stark Law

• AKS applies to all health care providers and anyone else

who can influence referrals; Stark applies only to physicians and DHS entities to whom they refer.

• AKS applies to all items or services reimbursable under

FHCP; Stark applies only to Designated Health Services.

• AKS requires willful intent to induce referrals; Stark

imposes strict liability.

• Failure to fit relationship within AKS safe harbor does not

mean automatic violation; failure to fit relationship within Stark exception does mean automatic violation.

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False Claims Act

31 U.S.C. 3729-3731

• As amended by the Fraud Enforcement and Recovery Act of 2009 (FERA),

liability under the False Claims Act occurs when a person or entity: 1)

knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;

2)

knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim; or

3)

conspires to commit a violation of any of certain provisions of the False Claims Act (including the two listed above).

• Violations are punished by penalties of not less than $5,500 and not more

than $11,000 per claim, plus treble damages for the amount of damages the Government sustains.

• FCA is the primary enforcement tool for combatting fraud and abuse in

federal health care programs.

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False Claims Act (cont.)

• Qui Tam provisions of the FCA permit any person to file an FCA

lawsuit, under seal, in the name of the United States

• “Relators” receive a percentage of any settlement – 15 - 25% if the

government intervenes and 25 - 30% if the government does not intervene and the relator moves forward with the suit.

• Conduct must be “knowing,” defined (§ 3729(a)(1(b)) as:
• Actual knowledge of the information
• Deliberate ignorance of truth or falsity of the information
• Reckless disregard of truth or falsity of information
• Statute of Limitations is no more than:
• 6 years from the date the violation is committed; or more than 3 years after

the date the facts materials to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances (but no more than 10 years after the violation is committed)

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2009 Expansion of the FCA

• FERA expands federal FCA liability to include, among other

things, retention of overpayments.

• Section 3729(a)(1)(G):

“Any person who …knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government …” (emphasis added)

• Obligation” defined as:

“an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor-licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment…” (emphasis added) (31 U.S.C. § 3729(b)(3))

• Creates FCA liability for knowingly retaining any overpayment.

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ACA 60-Day Report/Return Rule

• ACA Section 6402(a): If a person has received an overpayment,

the person shall:

• Report and return the overpayment to the Secretary, the state, an

intermediary, a carrier, or contractor, as appropriate; and

• Notify the Secretary, the State, an intermediary, a carrier, or contractor

in writing of the reason for the overpayment

• Deadline for reporting and returning is the later of:
• The date which is 60 days after the date on which the overpayment was

identified; or

• The date any corresponding cost report is due, if applicable
• Enforcement: FCA liability created for knowingly retaining (i.e.,

not reporting and returning) any overpayment within 60 days

• f the date on which the overpayment was “identified.”
• When do you “identify” an overpayment?

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ACA 60-Day Report/Return Rule

• Final Rule published February 12, 2016; effective March 14,

2016 (although statutory obligations effective March 23, 2010)

• 60 days after date on which the overpayment is identified or date any

corresponding cost report is due

• Overpayment is identified when it was “determined that the person has

received an overpayment and quantified the amount of the

• verpayment.”
• Overpayment is identified when “if a person fails to exercise reasonable

diligence and the person in fact received and overpayment.”

• CMS believes it should take no longer than 6 months to identify

an overpayment, after which the provider has 60 days to report and repay (absent “extraordinary circumstances)

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1

Common Hospital/Physician Arrangements and FMV Approaches

Market Trends in Physician Compensation

• MGMA recently announced that over 50% of the respondents in its survey

are employed physicians rather than independent practice physicians. Massive shift since 2008.

• Independent practices are increasing in size.
• More physicians are employed or aligned (i.e., foundation model/PSA)

with hospitals and health systems.

• Causes:
• Reimbursement pressure, particularly on imaging and other ancillaries
• Push toward integrated networks for quality and efficiency goals (ACO’s, CIN’s, etc.)
• Costs, risk tolerance and lifestyle considerations for physicians are pushing more

physicians to seek a closer relationship with a hospital or health system, either through employment or a PSA type of arrangement

25

Employment Agreements Overview

• There continues to be an upward trend in physician

compensation overall. However, we are beginning to see more volatility in the year over year compensation changes. It is not a given that compensation will go up every year in every specialty.

• Productivity-based models are in vogue; median

compensation per wRVU is a widely viewed metric.

• Employment agreements have many moving parts…

the “terms and features” are critically important.

• Can in-market physicians be paid at higher rates?
• Benefit plans are becoming more robust.

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Employment Agreements: Using Survey Data

• Problems with Survey Data:
• Surveys are voluntary – not random samples
• Respondent pools vary widely (some groups not well represented
• Limited regional and local data
• Cherry-picking from surveys or tables within surveys
• Survey data can be misleading (e.g., physician productivity data)
• As one example (from 2016 MGMA data), for general surgery:
• 90th percentile cash compensation = $702,000
• 90th percentile wRVUs = 11,162
• 90th percentile compensation per wRVU = $108.23
• Therefore, 11,162 x $108.23 = $1,208,000!! (i.e., 172% of the 90th

percentile)

27

Employment Agreements “Stacking”

If you label compensation layers by different names, you can stack them higher and higher!

• Sign-on bonus
• Productivity bonus
• Medical directorship (valuing admin versus clinical time)
• Co-management agreement
• Quality bonus
• Retention bonus
• Call pay
• Tail insurance
• Excess vacation
• Relocation costs
• Excess benefits

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FMV Pitfalls Issues in Employment Arrangements

• Compensation Plans that Result in Practice Losses
• What magnitude of losses is acceptable?
• Are practice operating expenses fully allocated to the

practice?

• Can you use a compensation formula that guarantees losses?
• Incremental/bonus compensation that increases losses?
• Income Guarantees
• Time frame of the guarantee
• Factors for establishing compensation
• Overly large sign-on bonuses

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Employment Agreements Net Income Compensation Models

• Calculation of applicable revenues
• Calculation of appropriate O/H expense
• Available benchmark data
• Normalizing historical experience
• Accounting for physician extenders
• Who pays?
• What credit can accrue to the physician?
• Distribution of net income
• Is it acceptable to distribute it all?

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FMV Pitfalls Issues in Employment Arrangements

• Net Income Compensation Models
• Is physician receiving any revenue credit for ancillary

services?

• Does the methodology meet the requirements of the

arrangement?

• Any safeguards directed to high volume producers?
• 90th percentile? 125% of the 90th percentile?
• Are services coded correctly?
• Ceiling on compensation?

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Stark Law Employment Exception

• Stark Law Employment Exception:
• Identifiable Services
• Remuneration is consistent with FMV of services and not

determined in a manner that takes into account the volume or value of any referrals

• Commercial Reasonableness
• Productivity bonuses based on personally performed

services

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Stark Law Employment Exception

• What Are Personally Performed Services?
• Just that – services provided directly by the “referring”

physician

• CMS has indicated that any request of another individual,

including employees, contractors, coworkers or under “incident to” billing guidelines, constitutes a referral. 66

• Fed. Reg. 871 (2001).
• Furthermore, technical components of hospital services

represent a referral even though the physician’s professional services for the same procedures does not

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Stark Law: Employment Exception v. IOAS Exception

• Comparison of IOAS and Employment Exceptions

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IOAS Employment Profit Sharing

Profits of DHS revenue may be shared between owners (subject to restrictions) May not share profits with employed physicians

Productivity Bonus

Bonus may include services performed “incident to” physician services Bonus only based on personally performed services

Vary with DHS Volume or Value?

Neither may be based directly on v/v of DHS referrals Neither may be based directly or indirectly on v/v of DHS referrals

Restrictions

Must be in a “group practice” and meet significant other requirements (location, percentage of practice) Need only have “bona fide employment relationship” (consistent with IRS definition)

US ex rel. Parikh v. Citizens Medical Center

• Allegations
• Hospital knowingly and willfully paid bonuses to emergency room physicians

who referred to the chest pain center and the bonuses were paid by splitting the compensation between the hospital and the referring emergency room physicians

• Doctors were guaranteed “many time more in salary than [they] earned in

private practice” and income more than doubled after the physicians joined the hospital, despite fact that practices lost between $400K and $1mm.

• Court ruled regarding one group of physicians: “it would make little apparent

economic sense for [the hospital] to employ cardiologists at a loss unless it were doing so for some ulterior motive – a motive Relators identify as a desire to influence referrals.”

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US ex rel. Baklid-Kunz v. Halifax Hospital Medical Center

• Halifax Hospital Decision
• Case in Florida found Stark Law violation where payments to employed
• ncology group not protected by exception.
• Group was given a percentage of all revenues of oncology department, which

included DHS revenues, and then pool was allocated to each physician in group based on personally performed services.

• Court held that “The Incentive Bonus was not a ‘bonus based on services

personally performed’ . . . [but] was divided up based on services personally performed . . . The bonus itself was based on factors in addition to personally performed services -- including revenue from referrals made by the Medical Oncologists for DHS. The fact that each oncologist could increase his or her share of the bonus pool by personally performing more services cannot alter the fact that the size of the pool (and thus the size of each oncologist’s bonus) could be increased by making more referrals.” (emphasis in original).

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US ex rel. Drakeford v. Tuomey Healthcare System

Tuomey Healthcare System, Inc.

• Two Long Trials; 2nd Trial (April 2013) large verdict against Tuomey; appealed again and then

settled.

• 1st Appellate opinion (March 2012) – key rulings
• Facility component of personally performed services are referrals.
• Fixed compensation that considers anticipated referrals “by necessity takes into account

the volume or value of such referrals” under Stark.

• 2nd Appellate Opinion (July 2015) – key rulings
• Two components of compensation varied with the volume or value of referrals – annual

adjustment of comp and productivity bonuses.

• Confirms view that facility component of personally performed services are referrals,

ignoring CMS commentary.

• New developments in 2016:
• Settlement with CEO for substantial sum ($1 million) and other penalties
• Lawsuit against the law firm that represented Tuomey

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US ex rel. Singh v. Bradford Regional Medical Center

• Sublease arrangement for use of physician group’s nuclear

camera consisting of total pass-through cost of lease plus four times as much for a covenant-not-to-compete.

• Hospital paid physician group rent for camera space,

secretarial and administrative expenses associated with

• peration, and a billing fee equal to 10% of all Bradford

collections

• Bad facts: CEO deposition testimony – would not have

pursued the deal if he knew the hospital would not receive any referrals from the physicians. FMV analysis obtained by hospital valued several revenue streams.

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Volume or Value Standard - What is it?

• Definition of an Indirect Compensation Arrangement (second prong):
• “The referring physician … receives aggregate compensation … that

varies with, or takes into account, the volume or value of referrals or

• ther business generated by the referring physician ….”
• Requirement of many compensation exceptions:
• “The compensation to be paid … is set in advance, does not exceed

[FMV], … and is not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties.”

• Tuomey Court: “We conclude from the regulatory definition of [FMV] and

the applicable agency commentary that compensation based on the volume or value of anticipated referrals implicates the volume or value standard.”

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Volume or Value Standard - What is it?

Bradford Regional Hospital:

• “There really is no dispute that the amount of the non-compete payments was

arrived at by considering the amount of business BRMC would receive from the doctors. Although Defendants do not explicitly state that they ‘took into account’ the anticipated referrals from [the doctors] Vaccaro in arriving at the non-compete amount, a review of their briefs shows that Defendants implicitly concede that the value of the doctors‘ anticipated referrals was a part of the negotiations.”

• “We conclude that the compensation arrangement between BRMC and the

doctors is ‘inflated to compensate for the [doctors] ability to generate other revenues.’‖66 Fed.Reg at 877. Specifically, we find that the amount of the compensation arrangement was arrived at by taking into account the anticipated referrals from the doctors. We therefore conclude that the compensation arrangement between BRMC and the doctors is not ‘fair market value’ under the Stark Act.”

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US ex rel. Schubert v. All Children’s Health System

• All Children’s Health System Decision
• Unlike AKS, Stark law employment exception requires FMV
• Relator alleged that, despite the compensation plan she

developed such that pediatric neurosurgeons would paid between 25th and 75th salary percentile, hospital executives overcompensated these physicians.

• Physician group operated at a loss while hospital saw

“financial boon” due to referrals.

• Nearly 1/3 paid above the 75th percentile.
• Treatment of Medicaid claims?

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US ex rel. Schubert v. All Children’s Health System

• Court ruled that the relator sufficiently alleged financial

relationship that took into account anticipated referrals and ability of physicians to generate business

• FMV benchmark created “by drawing form the median of

three nationwide salary surveys and creating a competitive salary range.” Relator used that information to allege an FMV salary benchmark and alleged the salaries paid to recruited physicians exceeded that benchmark. The Court rules that this was sufficient to satisfy Rule 9(b).

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US ex rel. Villafane v. Solinger

• Relator alleged that Kosair Children’s Hospital submitted false

claims to the Medicaid program as a result of non-compliant financial relationships with members of a faculty practice plan

• Academic service agreements with physicians were “shams”

since no adequate time-keeping documentation and hospital and university failed to have adequate written agreement in

• place. Relator’s valuation expert alleged that physician

salaries exceeded fair market value

• Question before the Court was whether the parties complied

with the Academic Medical Center Exception

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US ex rel. Villafane v. Solinger

• Court ruled that the hospital met elements of AMC exception,

which were broad and intended to allow flexibility

• Court stated “[a]ny distribution of salaries in a marketplace

will show some higher or lower than others. Provided a salary is well within a statistical distribution defining the market as a whole, it seems difficult to argue that it is not fair market value.”

• Court noted that “[a]ny definition of fair market value that

would automatically deem anything over the median or indeed, anything at the 80th percentile, as necessarily not being fair market value would seem illogical.”

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US ex rel. Reilly v. North Broward Hospital District

• The relator alleged that the compensation was excess of fair

market value and commercially unreasonable because it was

• ver the MGMA’s 90th percentile of total cash compensation

and generated substantial practice “losses” for hospital.

• Hospital tracked and evaluated “inpatient contribution

margins” and “outpatient contribution margins.”

• Physician compensation was not financially self-sustaining

from professional income alone, but would be self-sustaining when taking into account facility fees, which the hospital tracked.

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US ex rel. Reilly v. North Broward Hospital District

• For example, an orthopedic surgeon was alleged to have been

paid $1,391,184 in 2008 and $1,557,984 in 2009

• MGMA 90th percentile compensation for orthopedic surgeons

in the Southern U.S. was $1,209,569 in 2009

• After evaluating the net revenue and expenses of the

practice, hospital faced a net loss of $791,630

• However, after tracking “inpatient contribution margins” and

“outpatient contribution margins” this surgeon’s contribution margin to the hospital was a profit of $867,326

• $69.5 million settlement in September 2015

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US ex rel. Hammett v. Lexington County Health Services District

• Hospital agreed to pay $17 million to settle allegations that it

violated the Stark Law based on improper financial arrangements with 28 physicians

• Allegations that the employment agreements were not

commercially reasonable and compensation was above FMV

• Relator’s proposed employment agreement included the

following terms

• 7-year “no cut” employment agreement
• Base compensation of $318,758 (above the 75th percentile for

neurologists) when historical production was at the 60th percentile

• Productivity bonus that would revalue every wRVU one productivity

crossed established threshold

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US ex rel. Hammett v. Lexington County Health Services District

• Physician’s productivity incentive include wRVUs produced by midlevel

practitioners under the physician’s supervision

• Productivity incentive was contractually based on wRUV values

established in 2010 Medicare PFS, rather than allowing for revised wRVU values as established by CMS from time to time.

• Complaint alleges that the physician earned $650,000 during

first year of employment, inclusive of $40,000 signing bonus, which is more than 150% of the 90th percentile compensation for 75th percentile wRVU productivity (based

• n MGMA data)
• Complaint alleges that the physician’s compensation in

private practice was $250,000

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2

Common FMV Pitfalls

FMV Pitfalls Use of Tainted Market Data

• Generally, any market data used to establish FMV must be

“arm’s-length.” Healthcare transactions are frequently suspect.

• A market approach is the preferred valuation approach for many

types of compensation arrangements.

• For certain types of arrangements, virtually no

“non-tainted” data is available.

• The valuator must consider alternate approaches.
• Consider whether the arrangement can be “cross-walked”

to a non-healthcare setting. If the arrangement would make sense in a non-healthcare setting, it may make sense in healthcare (provided that referrals are never considered/valued).

50 Strafford Webinar FMV in Hospital & Physician Transactions

FMV Pitfalls Misapplication of a FMV Opinion

Examples :

• Opinion was valid only over a specified range of outcomes.
• Misapplied “units”
• Surgical cases vs. procedures; patients vs. “fractions”
• Unrestricted vs. restricted call
• 24-hour on-call rate applied to a 14-hour call period
• FMV opinion is ambiguous or conditional.
• FMV opinion included critical governing assumptions that

were not considered in its application.

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FMV Pitfalls An Unreliable FMV Opinion

• Even with a fair market value assessment, many things

can still go wrong:

• The terms and provisions assumed by the appraiser may not

match the agreement.

• The valuator may have lacked sufficient knowledge of the

subject matters.

• Consider the “shelf life” of the appraisal, and whether there are

any post-closing obligations (such as a true-up).

• Is the appraisal compelling? Does it appear to meet the

standard that regulators may require?

Strafford Webinar FMV in Hospital & Physician Transactions 52

FMV Pitfalls Arbitrage Opportunities

• A physician organization is paid to provide turnkey

management services on behalf of a hospital service

• line. The physicians then engage a professional non-

physician owned organization to provide material components of the services.

• A hospital pays a physician group $1,500 per day for

call coverage; that group in turn contracts with unrelated physicians to provide the coverage for $1,000 per day.

Strafford Webinar 53 FMV in Hospital & Physician Transactions

Other Recent Regulatory Developments

• Senate Finance Committee Report on Stark
• Impact of election outcome on this initiative
• HOPD Reimbursement changes
• CMS commentary on Volume or Value Standard
• SGR Fix and shift to value-based payments (MACRA

and MIPS)

Strafford Webinar FMV in Hospital & Physician Transactions 54

Questions?

Chip Hutzler, JD, MBA | Partner HealthCare Appraisers, Inc. 561.330.3488 chutzler@hcfmv.com Albert Shay, Esq.| Partner Morgan Lewis & Bockius, LLP 202.739.5291 ashay@morganlewis.com