Fair Market Value and Commercial Reasonableness

  • Justin Chamblee, CPA

    Justin Chamblee, CPA

    Executive Vice President

    Contact
  • Richard Romero, CVA, ABV, FHFMA, PAHM

    Richard Romero, CVA, ABV, FHFMA, PAHM

    Senior Vice President

    Contact

Evolution of Physician and Advanced Practice Provider Compensation in Healthcare


Introduction

Physician and advanced practice provider compensation arrangements are continually evolving in response to market dynamics and regulatory standards. This evolution is crucial to ensuring competitiveness and compliance with industry regulations. This article explores the changing landscape, emphasizing the need for fair market value (FMV) and commercial reasonableness (CR) in compensation models.

Hospital Employed Provider Networks and the Shift to Value-Based Care:

The growth in hospital employed provider networks and the industry’s transition to value-based care necessitate valuation methods accommodating both fee-for-service and fee-for-value reimbursement. Notable changes include the integration of elements reflecting quality outcomes, cost efficiency, and patient experience. As fee-for-service and fee-for-value coalesce, the complexity of evaluating compensation arrangements rises, requiring more comprehensive assessments to maintain compliance.

Coker’s Expertise in Assessing Compensation Arrangements:

Coker, with extensive experience, specializes in evaluating compensation arrangements from FMV and CR perspectives. Their valuations cover various agreements, including employment, professional services, co-management, ACOs/CINs distributions, call pay, and medical director agreements. The firm tailors its approach to each unique situation, conducting thorough due diligence and providing clients with initial analytics, conclusions, and recommendations.

Tailored Approach and Multifaceted Analysis:

Coker views compensation valuation as a multifaceted analysis, where the valuator must comprehend both quantitative and qualitative aspects of a transaction. The firm utilizes quantitative market data as the foundation, combining it with their understanding of specific dynamics and industry expertise to formulate conclusions. Coker’s recommendations aim to guide organizations toward compliance in the ever-evolving healthcare market.

Conclusion:

As the healthcare landscape undergoes continual changes, compensation arrangements must adapt to meet evolving standards. Coker’s approach, rooted in both quantitative analysis and industry knowledge, ensures that organizations navigate these complexities with compliance and strategic insight.

Questions? Ask an expert!


    Contact us today for more information about our healthcare consulting services and learn how we can help your organization.

    Contact Us