Physician Fair Market Value

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Pinnacle's Fair Market Value Program

When contracting with physicians, a key element of risk management for hospitals is the determination of Fair Market Value (FMV). There are different approaches that can be used to identify fair market compensation, and Pinnacle has developed a comprehensive program to leverage both published data and market comparable methods.

Program elements include:
▪FMV Reference Tool (Workbook)
▪An Information Exchange Network, and
▪Focused Consulting.

Pinnacle's FMV Program is designed to add value to healthcare organizations by reducing costs and saving time while increasing consistency and reliability of FMV determinations.

>> Learn More

Endorsements and Affiliates

▪Endorsed by the Washington State
▪Hospital Association (WSHA)
▪>> WSHA member special pricing
▪
▪Oregon Association of Hospitals
▪and Health Systems (OAHHS)
Gold-Level Associate Member
>> OAHHS and Pinnacle will be hosting a
FMV webinar for OAHHS members on
March 4. Click here for more details.

Program Downloads and Collateral

▪Request a Sample from the Workbook

*** Click to request sample Workbook pages ***

New for 2008 – Physician Employment
Compensation Simplified

In response to Program participants and the growing
trend of physician employment by hospitals, Pinnacle
has developed an approach to help guide Workbook
users in the identification of FMV compensation for the
employment of physicians. >> Learn More

Fair Market Value News

CMS Issues Stark II, Phase III
Final Rules

On September 5, 2007 the Centers for Medicare & Medicaid Services (CMS) released the long anticipated Stark II, Phase III final rules. Set to be finalized 90 days after publication, the "Stark III" rules include key changes that include:

▪Elimination of the "safe harbor" for determining
▪fair market value for hourly physician
▪compensation;
▪A relaxing of physician recruiting rules;
▪A scaling back of the "indirect compensation
▪arrangement exception;
▪An addition to the professional services
▪arrangement exception establishing a six
▪month holdover concept.

>> Click here for the Stark II, Phase III rules published in the Federal Register

Elimination of "Safe Harbor" for Determining Hourly Physician FMV Compensation

CMS established a "safe harbor" in the Phase II rules stating that an hourly rate would be considered within fair market value (FMV) if that hourly rate met certain conditions based on either, (i) the average hourly rate of local emergency room physicians, or (ii) an analysis of the 50th percentile national compensation amount from physician compensation surveys.

The "safe harbor" has been removed due to questions regarding its application, as well as criticism about the methodology, and CMS reiterated that:

"The "safe harbor" was always voluntary and that parties could have, and may continue to, establish FMV through other methods."

Source: Stark II, Phase III Rules. Federal Register, September 5, 2007.

St. Jude Subsidiary Settles
Kickback Case

A subsidiary of St. Jude Medical, Advanced Neuromodulation Services (ANS), recently agreed to pay $2.95 million and commit to a three-year corporate integrity agreement.

According to the Health & Human Services (HHS) inspector general's office, ANS is alleged of paying physicians $5,000 for every test they the conducted using ANS's spinal cord stimulator. The payments were related to five patients in Plano, Texas.

Source: Blesch, Gregg. Modern Healthcare Daily Dose. July 5, 2007.

On-Call Specialist at Emergency Rooms Harder to Find, Keep

Hospital emergency departments across the United States are increasingly unable to find specialists to help treat seriously injured and ill patients, according to medical experts.

A nationwide survey by the American College of Emergency Physicians in 2005, the most recent available, found that of the 1,328 emergency department directors who responded, 73 percent said they had a problem with inadequate on-call coverage by specialists. That was up from 67 percent in 2004.

Source: Christopher Lee, Washington Post Staff Writer. Friday, December 21, 2007; A01.

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