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Determining Fair Market Value for a Hospitalist Agreement


Northeastern hospital system


To prepare an FMV opinion for three hospitals affiliated with a larger Northeastern health system, of the clinical and program management services provided by a national provider of hospital medicine programs.


Veralon conducted a detailed analysis of the hospitalist program expenses at each hospital and in aggregate, in order to evaluate the total compensation by the hospitals to the hospitalist service provider based on the market approach.


We assessed the program personnel and billing costs, administrative fee, implementation fee, and overall management fee and subsidy. In addition, we identified nationally recognized incentive arrangements to determine FMV for a performance bonus to be paid to the service provider.