Value judgments: Considerations and pitfalls in medical directorship and call valuations

Insight Article - August 29, 2019

Benchmarking & Forecasting

Provider Compensation

Valuations normally happen with two goals in mind in a medical group practice:

  1. Valuing the business (Physician owners sometimes get divorced, after all.)
  2. Valuing services.

The reasons, however, are more a matter of compliance. Stark Law, the Medicare Anti-Kickback Statute and other federal regulations limit the types of business relationships into which physicians can enter and mandate a commercial reasonableness known as fair market value (FMV).

Differences in methodology that underpin valuation work can have a significant impact on a medical group practice’s costs as they relate to physician compensation. That’s where Timothy Smith, CPA, ABV, principal, TS Healthcare Consulting LLC, enters the picture.

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About the Author

Chris Harrop
Chris Harrop
Senior Editorial Manager MGMA

Chris Harrop, senior editorial manager, MGMA, serves as editor of MGMA's flagship print publication, MGMA Connection magazine, and oversees various association content publications while also serving as a contributing author for the organization. Prior to MGMA, he was managing editor of multiple news organizations in the Denver metro area. Email him.

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