Appraisers now have the help they need...BVR’s Guide to Physician Practice Valuation dissects this tricky type of engagement. Mark Dietrich and several other top healthcare appraisal experts deliver current and comprehensive “how-to” guidance on valuation approaches, the impact of supply and demand on value, and many more relevant topics unique to physician practice valuation.

Table of Contents

Chapter 1. Supply & Demand:Assessing the Impact of the Shortage of Physicians on Value
Mark O. Dietrich, CPA/ABV

• Introduction
• Global Factors
• Domestic Factors
• Financial Effects
• Primary Care Physicians
• Effect on Value

Chapter 2. Report on the Healthcare Economy
Mark O. Deitrich, CPA/ABV

• National Health Expenditures Projections: 2008-2018
• Quarterly Health Care Indicators
• Concentration of Market Share
• The State of Managed Care
• Acute Care Hospitals: Average Length of Stay
• Acute Care Hospital Payments
• Physician Reimbursement
• Medicare Conversion Factor

Chapter 3. Healthcare Market Structure and its Implication for Valuation of Privately Held Provider Entities: An Empirical Analysis
Mark O. Dietrich, CPA/ABV

• Introduction
• Data Sources and Impact on Analysis
• Public Healthcare Insurers
• Public Hospital Companies
• Medicare Part A Spending
• Other Hospital Market Factors
• Surgery Centers
• Medicare Part B Spending
• Prevalence of For Profit Hospitals
• Radnet
• Acquisition vs. Same Store Growth
• Implications for Valuation of Private Healthcare Providers
• Other Uses of Market Data
• Conclusion
• viii BVR's Guide to Valuing Physician Practices

Chapter 4. Converting Physician Practices to Tax-Exempt Status: Is There an Upside to the Downturn?
Mark O. Dietrich, CPA/ABV

• Introduction
• Basic Tax Consequences
• Valuing Intangible Assets
• Personal vs. Enterprise Goodwill
• Hypothetical Sale
• Advantages of a Down Economy
• Conclusion

Chapter 5. The Anti-Kickback Statute and Stark Law: Avoiding Valuation of Referrals
By James Pinna, JD and Matt Jenkins, JD

• Anti-Kickback Statute
• Stark Law
• Valuation Contexts

Chapter 6. Choosing and Using the Right Valuation Methods for Physician Practices
By Mark O. Dietrich, CPA/ABV

• The Market in 2008-09
• Alleged Comparative Practice Sales Method
• Understanding Physician Practice Discount and Capitalization Rates
• Weighted Average Cost of Capital (WACC)
• Discounted CashFlow (DCF)
• Using the MGMA Compensation and Cost Data
• Accounts Receivable
• An In-Depth Review of the Correct Use of the Excess Earnings Method
• The Use of the Capitalization of Cashflows in Conjunction
  with the Excess Earnings Method
• Control Adjustments to the Excess Earnings Valuation Model?
• Chapter Summary
• The Thornton Letter

Appendix to Chapter 6: A Heathcare Appraiser Reviews a Judge-Appraiser's Report
By Mark O. Dietrich, CPA/ABV

• Introduction
• Timeline of the Case
• History of MedPAC's Identification of High-Tech Imaging
• Expense Trends
• The Medicare Conversion Factor
• BVR�s Guide to Valuing Physician Practices ix
• Reduction in the Relative Value of MRI Services
• A Quantitative Analysis of the Court's Excessive Terminal Growth Rate
• The Broader Revenue Picture in the Healthcare Industry
• An Observation on the Industry Risk Premium
• Conclusions

Chapter 7. Critical Condition- A Coding Analysis for a Physician Practice Valuation
By Mark O. Dietrich, CPA/ABV, and Frank Cohen, CMPA

• Introduction
• Established Patient Office Visits
• Other Examples
• Sources Of Data
• Identifying Problematic Coding
• Analysis
• Modifiers
• Utilization Of Tests
• Surgical Practices
• Beware Changes In The Value Of Codes
• Conclusion

Chapter 8. Understanding and Using the Technical and Professional Component of Ancillary Revenue when Valuing Medical Practices
Mark O. Dietrich, CPA/ABV, and Kathie Wilson, CPA/CVA

• Introduction
• Some Common Mistakes
• Jurisdictional Issues
• Transactions
• Individual Market Idiosyncrasies
• Conclusion
• What is incident to billing?
• Professional and Technical Component Analysis Checklist

Chapter 9. Designing a Chart of Accounts to Meet the Needs of Physician Practices
By David N. Gans, M.S.H.A., FACMPE and Steven Andes, PhD, CPA

Chapter 10. Medical A/R: Top Issues That Impact Your Valuations
By Mark Dietrich, CPA/ABV

• Write-offs: Why They May Occur in a Medical Practice
  

Chapter 11. Benchmarking Practice Performance
By Gregory S. Feltenberger, MBA, CACMPE, FACHE, CPHIMS, and David N. Gans, MHSA, FACMPE

• If You Don't Measure It, You Can't Manage It
• If You Don't Value It, You Won't Change It
• The "Value" of Benchmarking
• How to Benchmark
• Standardizing Data for Comparison
• What's Our Baseline?
• Methods and Checklists
• Small and Solo Practice Benchmarking
• Similarities with Larger Practices
• What's the Difference?
• Practice Measurement
• Art and Science of Benchmarking
• Benchmarking Methods
• Interpretation Pitfalls
• Key Financial Indicators
• Gross collection ratio
• Average cost per patient
• Departmental or service ratio
• Collections rate by payer
• Volume and reimbursement by service line
• Reimbursement per procedure code

Chapter 12. Understanding and Using MGMA Data to Normalize Physician Compensation and Perform Financial Statement Benchmarks
By David Fein, MBA

• Overview
• The Three Ps of Benchmarking
• Benchmarking Basics
• Benchmarking Checklist
• Normalizing Physician Compensation
• What is an RVU?
• How are RVUs and CPT Codes Related?
• Using the Physicians Compensation and Production Interactive Report
• Benchmarking Tools
• Physician Benchmarking Tool
• Physician Compensation Analysis Tool
• Physician Compensation Estimator Tool
• Physician Pay-to-Production Plotter Tool
• Physician Dashboard Report Tool
• Management Summary Analysis Tables Tool
• BVR's Guide to Valuing Physician Practices xi
• RVU 06-08 Conversion Utility Tool
• Financial Statement Benchmarking
• Finding Financial Statement Benchmarking Data
• Medical Practice Benchmarking Basics
• Using the Cost Interactive Report
• Staffing and Practice Data
• Benchmarking Tools
• Dashboard Report Tool
• Practice Performance Report Tool
• Advanced Benchmarking Report Tool
• Summary

Chapter 13. Evaluating RVU-Based Compensation Arrangements
By Mark O. Dietrich, CPA/ABV, and Gregory D. Anderson, CPA/ABV, CVA

Chapter 14. The CPA's Role in Mergers and Acquisitions Due Diligence Assistance to PPMCs and Private Equity Firms
By Ronald D. Finkelstein, CPA, and Lydia Glatz, CPA

• Introduction
• Professional Reporting Standards
• Engagement Planning
• Operating Statistics
• Patient Volume
• Charges and Collections
• Payor mix
• CPT Code Analysis
• Accounts Receivable
• Cash to accrual conversion
• EBITDA Measurement
• Tax Matters
• Appendix A: Sample Document Request
• Appendix B: Commonly Used Physician Practice Ratios

Chapter 15. When the Marriage is Over, What is the Practice Worth?
By Stacey D. Udell, CPA/ABV/CFF, ASA, CVA

• Standard of value
• Premise of value
• Valuation date
• Appreciation
• Buy/Sell agreements
• Goodwill
• Double dip
• Summation
• xii BVR's Guide to Valuing Physician Practices
  

Chapter 16. Jurisdictional Issues in Physician Practice Divorce Valuation: California 285
By Kathie Wilson, CPA, CVA and Tracy Farryl Katz, Esq., CPA

• Family Code 771, Earnings and accumulations after date of separation are separate property
• Family Code 2552, Valuation date of assets and liabilities
• Premise of value
• Property can be characterized as separate, community, quasi community or a combination
• Current Case Analysis
• Conclusion