Nationally known healthcare valuation expert Mark Dietrich recently retired from active practice—but he is very active in sharing the knowledge he amassed over 45 years in the field. During a recent BVR webinar on valuing specialty medical practices, he gave a few sage pieces of advice he said “only a retired expert would share,” although, in the past, he’s been very generous in this regard:

• A revenue analysis by Current Procedural Terminology (CPT) code is crucial for the valuation of any physician practice. CPT codes are an industry standard for coding medical procedures and services. If the practice is not forthcoming with these data, Medicare claims data for every physician in the country are located on the CMS website if you click here. These data can be sorted by physician specialty, state, locality, etc. or any combination thereof.
• For practices that make significant use of the codes for office visits (evaluation and management (E&M) codes), income can be manipulated in anticipation of the physician’s divorce or an M&A deal (yes, it happens). This type of scheme puts added importance on a multiyear coding analysis. Of course, this upcoding or downcoding could be inadvertent, but it still should be examined.
• Dietrich uses an Excel VLOOKUP function to summarize the services by major category using the Professional Edition of the AMA’s CPT Guide (a “must have” guide), and he assigns individual CPT codes to these categories by using a SUMIF function.
• His extensive research debunks the use of surveys for determining reasonable compensation in favor of a relative value unit (RVU) analysis. A free RVU calculator is available if you click here.
• The practice expenses RVU (peRVU) values must be modified to reflect site of service (a procedure done in the office versus a hospital or ambulatory surgery center). If not, your compensation calculation will be wrong.

These pieces of advice are just the tip of the iceberg—much more is included in Dietrich’s new book, Engagement Guide to Understanding and Valuing Medical Practice Specialties. You already have this book in your library if you are a subscriber to the BVResearch Pro platform.