Why Does a Rural & Community Hospital Need a Fair Market Valuation Opinion?
Financial relationships between hospitals and physicians are highly regulated. Like all healthcare organizations, rural and community hospitals should exercise caution in aligning their medical staff, employing physicians, and entering professional service agreements with independent providers. All financial relationships between hospitals and physicians are subject to scrutiny and organizations make certain that their provider compensation is reasonable and within fair market value (FMV). Organizations and physicians that don’t comply risk exclusion from federal payor programs or even fines or jail time under civil or criminal laws.
Beyond compliance, there are many reasons why rural and community hospitals might need an FMV analysis. If a hospital is receiving payments under a federally funded program, it is likely they will be required to provide an FMV determination for certain types of transactions.
Calculating the Fair Market Value of a Hospital During a Pandemic
The Fair Market Valuation Experience
Stroudwater’s approach to valuation opinions combines consulting expertise with financial modeling using market data. It also involves developing an understanding of what services look like in rural – the current market conditions, provider needs, patient access and economic trends specifically related to the type of entity or provider contract being valued. Establishing an entity’s value or the reasonableness of a contract using compliant valuation methods requires a data review and analysis, interviews with management, and a report outlining recommendations.
Our team brings a multidisciplinary perspective to fair market valuation. Stroudwater’s extensive experience in the accurate determination of FMV and the use of various valuation methods provides peace of mind throughout your rural hospital’s business transaction process.