Valuation Links

ALERT: CMS changed the location of the pages and files listed below three times in the last administration without leaving forwarding links and the pattern continues! As such, some of the CMS links below will be worthless.

Whether you are new to the business of valuing medical practices, or looking to update or develop a medical practice-specific valuation report with National Economic and Regulatory data unique to healthcare, use these links. Not enough time to do all of the research yourself? Purchase the Medical Practice Valuation Guidebook (Sorry, Sold Out! but call for options) and receive a free copy of our Report on the Healthcare Economy, including the Regulatory Environment and Medicare Program, suitable for inclusion in your own reports! (written by Mark O. Dietrich, CPA/ABV.)

Background on Healthcare
A Medical Dictionary search engine.
If you have ever wanted to locate the “single source” to an understanding of the Medicare program’s reimbursement methods for various classes of providers, this is it: The Medicare Payment Advisory Commission (MedPAC) Annual Report to the Congress. In addition to a comprehensive explanation of the methods, it contains recommendations to Congress for increases or decreases in the payment rates to Hospitals for both inpatient and outpatient services, Physicians, Skilled Nursing Facilities (SNFs), Home Health Services, Outpatient Dialysis and Ambulatory Surgery Centers.
Various summaries of the new Medicare Prescription Drug, Improvement and Modernization Act, the most significant legislation since the Balanced Budget Act of 1997.

A summary of the Balanced Budget Act of 1997, perhaps the single most important piece of legislation on healthcare finance since the Medicare program was adopted. A key component of any valuation report and valuator’s understanding of the healthcare reimbursement environment.
A summary of the Balanced Budget Refinement Act of 1999
The law firm McDermott, Will & Emery’s summary of the Benefits Improvement and Protection Act of 2000.
The location of CMS’ What’s New page.
The Centers for Medicare and Medicaid website index.
This is the location of the Health Care Indicators providing the most recent CMS data on Hospital, Employment, and Price Indicators for the Health Care Industry. Included are various tables displaying the current trend in days per 1000, admits per 1000 and medical price CPI, as well as many others. This is an excellent source of data for preparing that section of your valuation report that deals with current trends in the healthcare segment of the economy. Downloads are available in html and Adobe format.
Links to regulations relating to the Medicare program. Find our what the current state of the law is and make sure you demonstrate an understanding of it in your valuation report.
This is the company Interstudy’s site. Interstudy publishes a variety of statistical reports about HMO enrollment across the country and their findings are summarized here in periodic press releases. An invaluable source on what is going on in the HMO industry across the country and regionally.
An e-newspaper with a broad variety of healthcare news items and articles, submitted to us by pediatrician Dr. Jeff Lasker.
The Advance Data reports at the Center for Disease Control’s National Center for Health Statistics have been renamed National Health Statistics Reports and, of course, relocated(!) Much of the statistical data in the Medical Practice Valuation Guidebook came from CDC. You can quickly locate data such as Hospital Discharges or Ambulatory Surgery that may influence your valuation conclusion.

The most recently available Hospital Discharge Summary (2006). “The discharge rate per 10,000 population ranged from 940.2 in the West to 1,330.7 in the Northeast region. The average length of stay ranged from 4.2 days in the Midwest to 5.3 days in the Northeast region.” This tells you that utilization of hospital services in the Northeast is much higher than any other part of the country.
The location of many of the Medicare’s program statistical summaries of hospital utilization and costs. MEDPAR files contain information for 100% of Medicare beneficiaries using hospital inpatient services. Data is provided by state and then by DRG for all short stay and inpatient hospitals. As of this update (August 2009), the most recent data is 2007.
The Office of the Inspector General of Health and Human Services home page containing links to the laws and regulations that anyone valuing a medical practice should be certain to read! Get the latest information on changes in the volatile regulatory environment.
The Civil Division of the Department of Justice (DOJ) press release page where you can find the latest news about fines levied against healthcare providers in connection with the False Claims Act and qui tam cases, among others.
The location of the final Stark II regulations – don’t value a medical practice without reading them (or, at least, the summary of the regulations in the current edition of the Medical Practice Valuation Guidebook). To find the correct link, go down the page to “Health Care Financing Administration” (hint: use the ‘find’ command of your browser) and click on each of the three links for different portions of the regulations. Each link contains 50 pages of material.
This is the third ‘set’ of Stark II regulations, containing 11 pages. Pages 9 through 11 contain a list of Stark services by CPT code enabling you to identify those codes that present a potential problem area. For example, you may encounter a group practice compensation system where the income from those Stark services is allocated to the physician who ordered the test and no exception is available. The most recent listing of CPT and HCPCS codes (2012) covered by Stark is located here
If the government is concerned about the arrangements listed here, you should be too! This is the Fraud Alert page that lists to specific areas the Office of the Inspector General is looking for potential fraud. Be on the look out for these when conducting a valuation.
The link to the Office of the Inspector General’s WARNING to consultants, including valuation consultants, about practices which may violate federal civil and criminal statutes. Pay careful attention to page 4.
CMS’ periodic reports on various segments if the healthcare provider industry with invaluable summaries of market research.

Regional Data

Valuators generally want to review in their reports the state of the economy in the region in which the valuation subject operates. The links in this section provide access to government sites where this data is maintained.
This is the Census Bureaus entry point for population statistics, available by state and in various levels of detail.

Example contains the population broken down by five year age groups for each state in the nation. contains the Summary Statistics for the United States from the 2007 Economic Census by Major Industry (NAICS – North American Industry Classification System) Grouping. There are links to get the same data by state, county and metropolitan area!
This is the Census Bureau’s entry point for when detailed information from the 2007 Survey on conditions in the various segments of the economy will be released.
Example contains detailed information on Professional, Scientific, and Technical Services by Subsector.
Bureau of Labor Statistics home page with links to the various offices that maintain regional CPI statistics.
The Bureau of Labor Statistics’ Economy at a Glance page. Using a map of the United States, you can click on the valuation subject’s state and instantly locate current and historical employment, unemployment, and other employment stats.
The Bureau of Labor Statistics’ Industry at a Glance page with current information on each of the major sectors of the economy. Census Bureau’s 2006 report on the health insurance status of the country.

Quantitative Data

One of the most challenging tasks is finding the necessary quantitative data to use in the valuation model. The links below enable you to quickly obtain the risk-free rate and the rate of inflation for use in developing your discount and capitalization rates, as well as detailed physician reimbursement data of the type described in the Medical Practice Valuation Guidebook, Including Comprehensive Financial Analysis and the Influence of Managed Care.
Pennsylvania Health Care Cost Containment Council report page containing detailed data on hospitals and Ambulatory Surgery Centers in Pennsylvania, an excellent source of (free) data on revenues and profitability.
Health Affairs, The Policy Journal of the Health Sphere Owned and published by Project HOPE – The People-to-People Health Foundation, Inc.
The National Health Expenditure Projections presented here are based on the 2006 version of the National Health Expenditures released in February 2008. The Projections are estimates of spending for health care in the U.S. for the years 2007-2017. The Projections are presented by type of service delivered (hospital care, physician services, nursing home care, etc.) and by source of funding for those services (private health insurance, Medicare, Medicaid, out-of-pocket spending, etc.).

CMS Statistics The location of the following links:

Medicare Trust Funds

Medicare Rates Medicare Advantage capitation payment rates and information Estimated Sustainable Growth Rate and Conversion Factor for Medicare Payments to Physicians Analysis of physician response to changes in Medicare payment rates Medicare premiums, deductibles, and coinsurance

Medicare and Medicaid A brief overview of the Medicare and Medicaid programs Monthly Trend Report for Medicare & Medicaid

Health Accounts

Health Expenditures and Sources of Funds — historical and projected national health expenditures and historical estimates by state.
Health Care Indicators — contains data and analysis of recent trends in health care spending, employment and prices.
The Kaiser Family Foundation’s State Health Facts Online, a comprehensive aggregation of spending data on all types of healthcare. Perhaps the best site of its kind imaginable!
The direct link to individual state profiles. Click Health Costs & Budgets for statistical data.

Other – A Federal Reserve Board site that is updated daily with the 20 year treasury bond rate! Contains historical information sufficient to get data for virtually any valuation date.
Survey of Professional Forecasters on the current growth, inflation rate, and other key factors in the economy.
The Bureau of Labor Statistics Consumer Price Index page. An inflation calculator is located here that enables you to calculate the value of a dollar based on inflation since 1980.
With the changes to the CMS website, only certain utilization data seems to be readily available at the link above. The mother lode of free data: the file containing physician utilization by CPT code for 2004 is back: Utilization File [ZIP, 1.3MB]! This database can be opened using Microsoft Access. You can then sort the data, for example, by medical subspecialty (e.g., internal medicine, cardiology, etc.) and CPT Code sequence to obtain the “normal” coding pattern. You can then compare this coding pattern to the practice you are valuing. The most important codes to analyze for a medical (as opposed to surgical) specialty are the established patient visit codes, 99211-99215. For the consultative specialties, such as cardiology and gastroenterology, you should also look at 99242-99245. This type of analysis is explained in the Medical Practice Valuation Guidebook, Including Comprehensive Financial Analysis and the Influence of Managed Care . It is the key to a properly conducted valuation. (See the following link as well)

I have had many inquiries from users of this site about where to find the cross-reference to physician specialties listed by number in the physician utilization data above, and here it is. (See the previous link as well)
This page contains the state by state detail of the Medicare Physician Fee schedule for the years 1998 through 2008. This data can be used to evaluate the collectibility of Medicare charges in a physician practice. For example, you may compute the average collected fee for key CPT codes in a practice and compare it to this fee schedule using a vertical lookup table.


The following links give you the opportunity to sign up for e-mail newsletters from a variety of organizations that we at Dietrich & Wilson have found valuable in our healthcare practice.

Atlantic Information Services (AIS) main link to sign-up for one or more of their e-newsletters listed below.

AIS Health’s Government News of the Week. Just what it says, a weekly newsletter that tracks announcements by the Centers for Medicare and Medicaid(CMS), the OIG, the Department of Justice and various state regulatory authorities.

AIS Health’s MD Practice Alert. In addition to news relevant to physicians from CMS, this newsletter tracks such diverse items as the malpractice insurance crisis and news releases about physician recruitment and compensation.

AIS Health’s Business News of the Week. This weekly newsletter (Tuesday) tracks such things as trends in health insurance coverage, conversions of Blue Cross plans to for-profit status, and other items of note in the healthcare industry.

Other E-Newsletters

Modern Healthcare, a weekly industry magazine, offers a free daily newsletter. The topics are varied, including government action as well as the introduction of new pharmaceuticals, purchases and sales of hospitals, and anti-trust action.

Health Affairs, The Policy Journal of the Health Sphere, is a bi-monthly academic research publication sponsored by Project Hope. The e-mail newsletter offers summaries of select articles form the current issue, which is available online for free.

Need to acquire statistical data for benchmarking or excess earnings calculations?

Medical Group Management Association

Cost Survey; 2012 Report Based On 2011 Data (updated annually)

Physician Compensation And Production Survey: 2007 Report Based On 2006 Data (updated annually)

104 Inverness Terrace East
Englewood, CO 80122-5306
# (303) 799-1111

American Medical Group Association

1422 Duke Street
Alexandria, Virginia 22314-3430
# (703) 838-0033

American Medical Association

Medicare RBRVS: The Physician’s Guide
Capitation: The Physician’s Guide – Highly Recommended (may be out of print)
Physician Practice Management Companies: What You Need To Know
Physicians’ Current Procedural Terminology-CPT 05

515 North Street
Chicago, Illinois 60610
# (312) 464-4332