New rules for FMV in healthcare should dull DOJ’s sword

BVWireIssue #228-1
September 1, 2021

physician compensation, healthcare, healthcare appraisal, healthcare compensation

The Department of Justice has taken an aggressive stance in fraud and abuse cases involving the measurement of fair market value of physician compensation. Hospitals paid huge fines to settle cases such as Tuomey, Halifax, Citizens, and North Broward. But, this past January, new regulations from the Centers for Medicare & Medicaid Services (CMS) went into effect that clear up some of the ambiguity that made hospitals easy targets for these lawsuits.

Brighter line: During a recent BVR webinar on physician compensation, an audience member asked: “Will the new regs reduce or eliminate the DOJ’s aggressive enforcement?” While it’s unclear that the new regs will eliminate it, there is now a “brighter line” in terms of knowing what potentially could create issues, especially with respect to the matter of “commercial reasonableness,” which has been a major issue in past enforcement actions.

Kathryn Taylor and Justin Conant (both with PYA PC) conducted the webinar, Physician Compensation and COVID-19: Then and Now and Now What? A recording is available if you click here. For additional insights, see the article, “New Ballgame for FMV in Healthcare Under Final CMS Rules,” in the August 2021 issue of Business Valuation Update.

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