Valuation Services

Although the healthcare industry continues to expand as a whole, capturing a profitable share of it is becoming more challenging for providers by the day. Increased competition, expanding regulatory oversight, declining reimbursement, and the implementation of healthcare reform pose serious threats to hospitals’ revenue streams and physicians’ incomes.

Physicians and hospitals are realizing that they share a financial destiny. As a result, they are continuously looking for opportunities to collaborate through both employment and partnership arrangements. In order to ensure compliance with regulatory guidelines, including the federal Stark Law and anti-kickback statute, it is imperative for both parties to ensure that they enter these collaborative ventures in a commercially reasonable manner that is consistent with fair market value.

Blue Consulting Services has extensive knowledge and experience in providing a full spectrum of Business Valuation and Fair Market Value services to clients across the United States, ranging from sole practitioner physician practices to independent community hospitals and regional health systems. Our professional staff are well known and recognized as experts in the fields of valuation and consultation services and hold key certifications including Accredited Senior Appraiser – Business Valuation member of the American Society of Appraisers (ASA), Certified Valuation Analyst (CVA), and the AICPA’s specialty designation for business valuators (ABV).

Business Valuation

Business Valuation

The expansion of accountable and value-based reimbursement methodologies is catalyzing a new round of consolidation throughout the healthcare provider industry. Hospitals and health systems are increasingly turning to physician employment, mergers, and acquisitions to secure key clinical resources in order to ensure that their services can be provided in a coordinated and cost-efficient manner across the continuum of care. A business valuation is generally required as part of the general due diligence for any of these transactions and is imperative to ensure compliance with federal regulations.

Blue Consulting Services has been providing business valuations for over 18 years to a wide range of healthcare entities, including: single- and multi-specialty physician practices, ambulatory surgery centers (ASCs), dental practices, home healthcare, imaging centers, and specialty hospitals.

Our business valuation services include:

  • Acquisitions/divestitures
  • Appraisals of fixed assets
  • Financial reporting:
    • Accounting Standards Codification (“ASC”) 805, Business Combinations
    • ASC 958, Not-for-profit Entities: Mergers & Acquisitions
    • ASC 350, Intangibles – Goodwill and Other
    • ASC 718, Stock Compensation
  • Valuation of intangible assets
    • Non-competition agreements
    • Certificates of need
    • Workforce in place
    • Patient charts/records
    • Restrictive covenants
  • Joint venture partnerships
  • Litigation
    • Shareholder disputes
    • Marital dissolutions
    • Business interruption and loss
  • Damages
  • Shareholder buy-in/buy-out
  • Tax valuations

Fair Market Valuation

Fair Market Valuation

Physician and hospital alignment will be a key driver of financial success as accountable reimbursement methodologies like pay-for-performance, bundled payments, and shared savings become increasingly prevalent amongst governmental and commercial payers throughout the healthcare industry. In order to prepare for value-driven reimbursement, physicians and hospitals will continue to utilize a variety of collaborative arrangements/relationships to increase quality, decrease cost, and increase the coordination of care that they provide to their patients.

When hospitals and health systems partner with one of their key referral sources, i.e. physicians, federal regulations require that the terms of any agreement or relationship between the two parties be commercially reasonable and consistent with fair market value. Blue Consulting Services provides fair market value opinions and analyses for a wide range of arrangements and relationships, including:

  • Employment compensation agreements
  • Independent contractor professional services agreements (PSA)
  • On-call coverage agreements
  • Medical directorships
  • Management and co-management agreements
  • Subsidies/collection guarantees arrangements for hospital-based physician services
    (e.g. anesthesiology, hospitalists, etc.)
  • Leasing arrangements (e.g. staff, equipment, space, etc.)
  • Joint ventures