Mark Dietrich and Tim Smith, co-editors of the just-released BVR/AHLA Guide to Valuing Physician Compensation and Healthcare Service Arrangements, offer a framework for a new approach to FMV for physician clinical services based on hundreds of hours of research, modeling, and writing. Examine and deconstruct the purported governmental mandate for using the “survey says” paradigm for FMV purposes, including a data-driven and evidence-based rebuttal of the government’s FMV theory in the Tuomey and Halifax cases including discussion that will entail a review of regulatory language, court testimony, and enforcement trends. Hear new research on physician mobility trends and regional and state representation in published physician compensation survey data and the implications of this research for determining the FMV of physician clinical compensation. In response to the collapse of the “survey says” paradigm, attendees will get an introduction to the new market approach based on the RBRVS method. Learn the appropriate use of the independent investor test for physician compensation, a well-established concept for compensation valuation supported by tax law and business valuation. Together, these two methods replace “survey says” with a valuation framework that is far more defensible and valid, while resolving common issues regarding “stacking” of compensation elements, practice losses, and the move to value-based payments.
Program Agenda
Review of governmental guidance on FMV from regulations, commentary to regulations, court testimony, and enforcement case history and how “survey says” is not ultimately supported by this guidance
Examination of the hypothesis that all physicians should be paid the survey median because they can readily move somewhere else and by paid the median in contrast to actual data and evidence about physician mobility and migration patterns in the U.S
Introduction of the new market approach using the RBRVS method and how the government and qui tam relators are logically prevented from arguing against this approach
Overview of applying the independent investor test and how this method addresses questions about practice losses and net earnings from ancillaries, nonphysician providers, and other income sources
Learn how the “survey says” paradigm undermines value-based payments, and how to allocate those payments to physician compensation and owner’s equity
Using survey data appropriately in the valuation process
Learning Objectives
Know where to find the complete and accurate record of regulatory guidance and enforcement history about the FMV of physician compensation
Learn new insights about physician mobility and underlying data in the physician compensation surveys
Understand how to apply and use the RBRVS method and independent investor test in valuing physician compensation
Assess how to use survey data appropriately in comparative benchmarking analysis and in the cost to replace/recruit
Analyze the valuation issues involved in different engagement scenarios
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