A Professional Services Agreement (PSA) is a common arrangement that typically needs a third-party FMV opinion. At HVG, we’ve seen a couple of different assumptions or postures, if you will, with regard to how to properly estimate the FMV of a PSA. One assumption/view is what I refer to as productivity agnostic. This is where the health system is simply purchasing wRVUs (at FMV) from the physician-owned PC. When taking this approach, the productivity level of the physicians supplying the wRVUs is ignored. A safe value would be the “reported” median comp-per-wRVU published in the surveys. It’s very important to know that when looking at the reported comp-per-wRVU metric in the survey data, the higher values (75th and 90th) are representative of the lowest-producing physicians. And the lowest values (10th and 25th) are representative of the highest-producing physicians. So, in a situation like this, the median can be a safe and fair indicator. When using this approach, it seems to me that the FMV compensation compliance risk falls largely on the physician-owned entity since that entity is compensating the physicians directly.
The other assumption/view that we’re seeing is that by valuing the wRVUs based specifically on the productivity of the physicians that are producing the wRVUs. It’s paramount that the appraiser and counsel discuss the terms of the PSA and both understand what assumptions or posture to use when estimating the FMV of a wRVU in a PSA.