Chris David
Managing PartnerHealthValue Group
LEG03: Fair Market Value: Why it is Important and How to Calculate
The determination of fair market value (“FMV”) is critical for the protection of the DME supplier. For example, if a referral source (physician, hospi…The determination of fair market value (“FMV”) is critical for the protection of the DME supplier. For example, if a referral source (physician, hospital, long term care facility, etc.) refers federal health care program (“FHCP”) patients to the supp…The determination of fair market value (“FMV”) is critical for the protection of the DME supplier. For example, if a referral source (physician, hospital, long term care facility, etc.) refers federal health care program (“FHCP”) patients to the supplier, and the supplier desires to compensate the referral source for legitimate services, the arrangement needs to comply with the Personal Services and Management Contracts (“PSMC”) safe harbor to the federal anti-kickback statute (“AKS”). An important element of the safe harbor is for the compensation to be the FMV equivalent of the referral source’s services. The PSMC is also applicable when a DME supplier desires to compensate a 1099 independent contractor for marketing services. If a DME supplier desires to contract with a referring physician to be the supplier’s Medical Director, the arrangement must comply with the Personal Services exception to the federal physician self-referral statute (“Stark”). This exception contains the FMV requirement. As a final example, the concept of FMV enters the picture when an owner of a DME supplier is preparing the company for sale. This program will discuss the multiple ways that an FMV analysis can (i) protect a DME supplier from allegations of fraud and (ii) provide valuable information to the parties to a sale transaction. Equally as important, this program will discuss, in a “nuts and bolts” format, how FMV can be calculated.Show MoreClick the title to see all details
