Section 53.4958-6, which includes a rebuttable presumption that a transaction does not produce an excess benefit. Acquisitions of Community Hospitals by Not for Profit and Profit Systems.
3729). Terms associated with non-compliance include anti-trust, excess benefits, false claims, and fraud and abuse, among other terms. The concept of Fair Market Value can be viewed as a regulation that is in place so that monetary value is removed from decisions involving patients and their medical care. Violators can also be excluded from Medicare and Medicaid. If the violator is a hospital, the hospital would then have to pay taxes and would lose the right to issue tax-exempt bonds. Healthcare transactions that are typically subjected to a Fair Market Value analysis include, but are not limited to, business acquisitions, joint venture arrangements, payments made to physicians for either administrative or clinical services, income guarantees and practice support payments. You may need to download version 2.0 now from the Chrome Web Store.
Although it would still be considered a resource even if it has no value, transferring a resource with no value does not result in any uncompensated value.
The value of a non-cash resource is equity value (fair market value less any encumbrance). Although this ruling is the accepted commercial definition of fair market value, it does not constitute an adequate test of the fair market value for the compensation of physicians employed by hospitals or IDSs. Transactions and agreements determined to be inconsistent with FMV may come to bear civil or possibly criminal penalties. The Medicare Anti-Kickback Statute3 has a similar prohibition and requires that an arrangement is “consistent with fair market value in arms-length transactions and is not determined in a manner that takes into account the volume or value of any referrals or business otherwise generated between the parties for which payment may be made in whole or in part under Medicare, Medicaid or other Federal health care programs.”
© var today = new Date() Fair market value for one company may not represent fair market value for another. The cost of care services also plays a role in calculating the penalty. However, there is no equity value limit if a Medicaid applicant’s spouse lives in the home.
Violations of the False Claims Act can bring civil penalties against the provider. Compensation for physicians who practice in independent groups has traditionally been defined as the cash that remains after expenses are paid. Learn more about how the MGMA Health Care Consulting Group can help you. Any violator of Section 4958, in particular the manager who makes the decision and the person who benefited, will face civil penalties. As of 2020, the equity value cannot exceed $595,000, or $893,000, depending on the state in which one resides. Owner must apply for Medicaid, only asset is her mobile home, 21 years old, no lien. Because of their tax-exempt status, if they violate Fair Market Value, the Anti-Kickback Statute, or the False Claims Act, they may be subject to greater penalties. I will share some business considerations related to fair market value for physician compensation for clinical services, but I want to emphasize that this should not be considered legal advice.
A charge under the False Claims Act can be enforced with a civil penalty, whereas any charge under the Anti-Kickback Statute can be enforced with either civil or criminal penalties. Another law affecting nonprofit entities is the Excess Benefit Transaction Rule, or IRC Section 4958, which was passed by Congress in 1996. document.write(year) Carnahan Group. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. Another way to prevent getting this page in the future is to use Privacy Pass. Evolving market forces have created a new set of compliance standards for physician compensation arrangements. In Revenue Ruling 59-60, the Internal Revenue Service describes fair market value as the negotiated agreement to terms between a willing buyer and a willing seller under conditions of no duress and where each party has full knowledge of relevant facts. If an applicant gifted, transferred, or sold assets for less than their market value, the value of those improperly disposed assets helps determine the penalty. Another method of avoiding potential violations is to seek the assistance of appraisers and consultants who are knowledgeable and experienced in the area of healthcare Fair Market Value.
All decisions of treatment of a patient should be in the best interest of the patient, not in making sure the providers receive as much financial benefit as possible. Any nonprofit organization in violation of these statutes may have their tax-exempt status revoked. And since more than half of practicing physicians are “… now employed by hospitals or integrated delivery systems …,” according to an article in the New England Journal of Medicine1, the issue is more complex than it once was. In future articles, I will share some examples of fair market value tests of compensation arrangements for physicians who provide clinical services and examine compensation for medical directorships and on-call pay. • Providers and individuals can avoid these violations by seeking legal advice from a competent attorney or attorneys who are knowledgeable in the area of healthcare law.