This court ruling will definitely raise some eyebrows. In the case S&G Labs Hawaii v. Graves, Civ. No. 19-00310, 2021 WL 4847430, the judge allowed a commission payment structure between a lab and the accounts manager because the account manager was selling directly to physician practices and other clinics/facilities and NOT selling directly to the “individual” (i.e. the Medicare patient). HVG receives calls regularly to conduct FMV assessments for management and marketing arrangements for labs. The most risk-averse clients are structuring their arrangements as a fixed flat fee which is usually a cost-plus mark-up structure. However, the EKRA law is quite cumbersome, and this … [Read more...]
FMV of MSO management fees
State laws normally dictate whether an MSO can contract with a provider organization on a % of reimbursement fee structure. In most of the cases we see at HVG, the healthcare attorney has stipulated that the management fee be a fixed fee (rather than % of reimb.), especially if any type of “marketing services” are involved. States with strict fee-splitting laws generally prohibit a % of reimbursement management fee. The fair market value management fee should be developed by looking at the perspective from both the MSO as well as the provider organization. The safest and most common method of arriving at an FMV management fee is by use of the “cost plus mark-up” … [Read more...]
Behavioral Health – Sector Snapshot
The impact of COVID-19 has been unprecedented and staggering, with behavioral health services witnessing a positive demand shock across the U.S. during the pandemic period. Demand for behavioral health services jumped significantly in 2020, with a sharp rise in suicide attempts and drug overdoses. According to a report by McKinsey & Company, the US saw a 50% increase in the prevalence of behavioral health conditions as a result of the COVID-19 pandemic. In 2020, mental health providers faced decreased revenues and increased costs, all as demand spiked. Clinicians who had in-person daily visits witnessed a devastating income loss owing to the stay-at-home restrictions imposed. However, … [Read more...]
Telehealth M&A Snapshot
The global telemedicine market size was estimated to be $144.38 billion in 2020. As a result of the COVID-19 impact, the telehealth market grew an estimated 135.2% in 2020 compared to the average annual growth rate during the 2017-2019 period. The market is projected to grow to an estimated $636.38 billion in 2028 at a CAGR of 32.1% over the 7-year period. In the US alone, IBISWorld estimates the telehealth services market to be $3.5 billion in 2021 and grow by 9.6% for the full year 2021. However, as of late summer 2021, virtual visits have stabilized, but still at levels much higher than before the pandemic. Although telehealth visits continue to grow, the growth has slowed considerably … [Read more...]
10 Mistakes to Avoid When Determining a Physician’s Compensation
Establishing the fair market value (FMV) for a physician’s compensation is a major area of focus for healthcare organizations when entering into employment/contract arrangements with physicians. Appraisers and hospital compliance departments typically rely on data from benchmark compensation surveys when estimating FMV compensation. Some of the prominent survey sources used for this purpose include Medical Group Management Association’s (MGMA) Physician Compensation and Production Survey reports, American Medical Group Association’s (AMGA) Medical Group Compensation and Productivity Survey and Sullivan Cotter’s Physician Compensation and Productivity Survey. The following are 10 common … [Read more...]
What is the FMV of Data – Part 2
In (Part 1) of this whitepaper, I discussed some basic tenants and fundamentals that must be established before an analyst can apply value methods and techniques to determine the fair market value of a database. The gist is, a database is a collection of datasets which is appropriately considered an intangible asset. Databases are being used more and more in AI applications as well as drug development and value-based arrangements. More often, organizations are willing to buy and/or sell their de-identified patient data, and the question of fair market value will begin to emerge more often for compliance with the Anti-Kickback Statute. There are three main approaches to valuing a database; … [Read more...]
State of the Industry: Urgent Care Centers
The urgent care industry has been growing steadily over the last decade. But the last 18 months have shown a significant increase in patient visits to urgent care facilities. In fact, new patients nearly doubled compared to the previous year based on data gathered by Experity[1]. The COVID-19 pandemic has driven a large portion of the demand due to testing requirements and overcrowded ERs. But the surge of attention doesn’t seem likely to fade away after the pandemic either. Over the last 18 months, the urgent care industry has been able to showcase its many advantages and, in some cases, offer an alternative solution to emergency departments. Urgent Care vs ER Urgent care … [Read more...]
Feds Target Telehealth Fraud – Schemers Charged with $1.4B in Losses
The DOJ has cracked down on recent fraud facilitated by the COVID-19 pandemic and telehealth services. 138 medical professionals were recently charged for alleged healthcare fraud, with the bulk of the scams being committed by telemedicine executives. The charges target over $1 billion in fraud committed by telehealth services. This is accompanied by $133 million in schemes related to substance abuse treatment facilities and $160 million in illegal opioid distribution and other healthcare fraud. Court documents state that telehealth executives allegedly compensated medical professionals to order unnecessary medical equipment, diagnostic testing, and pain medications with minimal to no … [Read more...]
HVG Fraud Alert
The HVG staff reviews the DOJ enforcement actions on the daily, and lately we’re seeing a frequent fraud in the form of overprescribing and kickback schemes in the following areas: DME prescriptionsToxicology labs and urinating testingGenetic testingPain creamsPain medicationsSubstance abuse clinics The latest case released by the DOJ involves a Virginia Dr. who was prescribing expensive compounded pain and scar creams and referred the patients to a compounding pharmacist in return for “a percentage of the profits….” read more here... … [Read more...]
What is the FMV of Data? – Part 1
The use of artificial intelligence (AI) is rapidly evolving and the demand for data is rapidly growing. Many industries are finding ways to deploy AI technology to improve efficiencies, increase sales, lower costs and automate processes. In the healthcare space, hospitals, insurers, medical device companies, and pharmaceutical companies are generating, collecting, acquiring and utilizing data for AI and value-based arrangements. Generally speaking, the more data the better. As such, data is valuable. But the question is, just how valuable? This question is now being raised and will continue to grow in popularity. Data in the healthcare space is used to improve the … [Read more...]
