Fair Market Value Opinions: Practical Tips for Engaging Third-Party Appraisers and Securing Client Buy-In During the Valuation Process

• August 01, 2023

• John E. Buerkert Jr. , Children's Health
• Jonathan Nowlin , Children's Health
• Nicholas Janiga ASA , HealthCare Appraisers

Spend any amount of time in the health care industry and it won’t take long to recognize the importance and prevalence of the term “fair market value” or “FMV.” Particularly for attorneys who work on arrangements with physicians or other referral sources, FMV is a routine part of their practice. Structuring an arrangement that is consistent with FMV is not just a “nice-to-have,” but rather is a necessary requirement for many types of health care arrangements. For example, many of the exceptions to the Physician Self-Referral Law (Stark),¹ including the employment exception, the personal services exception, the academic medical centers exception, the isolated transactions exception, the rental of space and equipment exceptions, and, not surprisingly, the fair market value exception, all require compensation paid under the arrangement to be consistent with FMV.² Additionally, for compensation under an arrangement that might implicate the Anti-Kickback Statute (AKS),³ the parties may seek to structure the arrangement to fit within an applicable AKS “safe harbor,” many of which include an FMV requirement.⁴ And, in arrangements involving tax-exempt and disqualified persons, the parties should confirm FMV to establish a rebuttable presumption in potential excess benefit situations.

ARTICLE TAGS

• Fraud and Compliance