Medical Practice Valuation Engagement Types

Physician Goals Determine Appraisal Acuity Levels

By Staff Writers  

Medical office valuation is as much art as fair-marketing accounting science. And, most physicians are unaware that – much like an IRS audit – there are several levels of acuity which may be obtained for various reasons. Although not standardized, the following three acuity levels are typical valuation engagement types: 

The Comprehensive Valuation

An extensive service designed to provide physician-owners and/or potential purchasers with an unambiguous opinion range on the value of a medical practice, ASC or healthcare entity. It is supported by all procedures that appraisers deem relevant to the engagement with onsite visit mandatory.  

This valuation type is suitable for contentious situations like divorce, partnership dissolution, sale, etc. The report includes a formal written Opinion of Value suitable for litigation support activities like depositions and trial. It is also useful for external reporting to bankers, investors, the public, etc.

A Limited Valuation  

This engagement type is the next step in acuity from a comprehensive appraisal as it lacks the performance of additional procedures that are suggested in an USPAP appraisal. 

It can be considered an “agreed upon procedures” appraisal that should only be used in circumstances where the client is the only user of the appraisal or as an organic growth ingredient; but not for external reporting. No onsite visit is needed for this US mail or fax delivered valuation.

A formal Opinion of Value is not rendered.

Ad-Hoc Valuation

This is the lowest level engagement where the appraiser is to provide a very gross and non-specific approximate indication of value based upon the performance of limited benchmark procedures by the firm.

No onsite visit is needed. Neither a written report nor an Opinion of Value is rendered. May be a voice based consultation. 

Other Engagements: 

Although not strictly valuation acuity levels, other engagement types include: 

Forensic Investigations

These provided for medical income and personal asset determinations and tracings as an essential modified component of most all medical practice valuations services. 

CYA Investigations

This report is an opinion whether or not a valuation is required. It is ideal for the physician client or health law attorney who is unsure if a practice has value or wishes to “cover your assets”. 

Conclusion

Your informed comments are appreciated.

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Medicare Mandating Electronic Prescriptions

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Proposed Legislation for 2011

[By Staff Writers]

In one of their final acts for 2007, the American Medical News just reported that US House of Representatives and Senate lawmakers introduced new legislation mandating e-prescribing for Medicare participating providers, beginning in 2011. The bill, if enacted, would fine physicians who continued writing paper prescriptions after January 1, 2011.

Paradoxically, it would also allow the Department of Health and Human Services [HHS] to grant one or two year financial hardship exemptions for not using the appropriate technology. Of course, the definition of “hardship” would be left up to HHS discretion.

The proposal also provides one-time Medicare grants to offset the costs of technology: $2,000 in the first two years of implementation, $1,500 in the next two years, and $1,000 permanently thereafter. 

Assessment

Finally, doctors would also receive a one percent bonus on Medicare Evaluation and Management {E&M] services provided in conjunction with an e-prescription. Compensation for E&M services provided during a visit using a paper prescription would be cut by 10 percent if the prescription could have been handled electronically.

Conclusion

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