By Adam Turteltaub

Fair Market Value (FMV) calculations in healthcare, if done improperly, can lead you down the path to civil monetary penalties or even prison. To help understand the challenge and how to meet them, we spoke with Bob Wade, Partner at Nelson Mullins and host of the Stark Integrity Podcast Series.

Calculating FMV has proven to be somewhat of a moving target. For some time benchmarking multiple sources and calculating an average was sufficient. Then in 2007 the expectation changes, as they did again in 2021 in the final regulations under the Stark law. Now, the rules are transaction specific, requiring compliance teams to look at the market, benchmarking data as well as business-specific factors.

If that seems like a lot, it can be, which leads some to outsource the work. It may be better, though, to do so only for larger transactions. He notes that, if you do outsource, be sure to give the third party the best data you have available, otherwise garbage in can lead to a garbage FMV.

When you receive the valuation, don’t just accept it at face value. He advises to take the time to study it to determine if it makes sense and accurately reflects the data and market situation.

Listen in to learn more about how to get Fair Market Value calculations right.

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