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Fair Market Value Opinion for Ambulatory Surgery Center Management Agreement
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Fair Market Value Opinion for Ambulatory Surgery Center Management Agreement

Client/Profile

Prominent New England health system, including a teaching hospital and health plan

Challenge/Situation

To provide expert opinion on the fair market value of a management agreement between the health system and a 10-member orthopedic practice. The agreement was to provide the terms for the group to manage an orthopedics-focused ambulatory surgery center for the health system.

Process

We reviewed and clarified the specific business and clinical management services the orthopedics group would provide, quantified the level of effort in FTE terms, and created a financial model of the base and performance management fees.

Results

As a result of this analysis, certain management agreement provisions were modified to ensure that the arrangement was equitable and at fair market value.

The modified agreement was put in place, allowing the health system to improve management, throughput and activity at the ambulatory surgery center.