I am please to report that editing on the 2012 Guide is completed. The May release will feature 12 New Chapters and 14 Revised Chapters.  In addition to the contributors noted in my January 8 post, Todd Sorensen and VMG have updated their chapter on Ambulatory Surgery Centers, Andrea Ferrari of HAI and Tim Smith have updated their Medical Director chapter and Mark Browne, M.D., Burl Stamp, FACHE and David McMillan, CPA of PYA have contributed a new chapter on Whole Hospital Co-Management Agreements.

The contributors and I have been working hard on the Third Edition of the Guide, the most comprehensive work on valuation in the Healthcare Industry. This update will expand that coverage exponentially, thanks to a herculean effort by Tim Smith who has contributed some 70,000 words on Physician Compensation Valuation, the first-ever detailing of this discipline!  Tim’s work is a remarkable contribution to the Body of Knowledge in valuation and represents hundreds of hours of work.

Carol Carden, Greg Anderson, Scott Safriet, Jim Pinna, Matt Jenkins, Doug Smith, Jason Ruchaber, Ann S. Brandt, Ron Finkelstein and Lydia Glatz have all updated their chapters and more of the second edition contributors are planning to do so. I have updated my own and written several new chapters, including one on the Bradford Regional case and another on physician buy-ins and buyouts, and Carol Carden and I have a significant new chapter on valuation of Accountable Care Organizations. Perhaps the most important material ever written on business valuation in healthcare, a detailed chapter on the abuses of the Cost Approach, is included with multiple authors from the nation’s leading healthcare appraisal firms.

When the new Guide is available, the details will be at this link: http://www.cpa.net/publications/bvrs-guide-to-healthcare-valuation/.  I’ll also be opening the 2012 edition of BVR’s Healthcare Symposium on January 24. You can learn more here: http://www.bvresources.com/defaulttextonly.asp?f=hcseries12.  You can subscribe to the entire series AND receive the new Guide!

Following up on questions asked at the session. The Medicare tax on Net Investment Income in 2013 does not treat taxable Social Securty benefits as Investment Income.

The Reform law requires requires group health plans and health insurance issuers that provide dependent coverage of children to continue to make such coverage available for an adult child until age 26. Group insurers have an obligation to notify and it appears that a self-insured employer would have an obligation to notify insureds about this coverage. Children who are eligible to participate under their own employer’s plan are not eligible at present if their parent’s plan qualifies under the grandfathering provisions. However, in 2014, children could choose between staying on thier parents’ plan or their own employer’s plan. Finally, the law does not require health insurance plans to provide any dependent care coverage, but if such coverage is provided, it must extend to children under age 27.

Link to IRS webpage where new Announcements on Reform are posted.
http://www.irs.gov/newsroom/article/0,,id=220809,00.html

I’ll be speaking on Monday August 2 in Washington DC for CPA Associates Intl at their annual valuation conference on Medical Practice Valuation in the post-Reform era and on the incorrect use of the Cost Approach in valuing practices.

I’ll be speaking at the BVR Divorce Summit in Chicago on September 14 on Reform’s impact on the Valuation of Medical Practices.

I’ll also be speaking at the Michigan Association of CPAs 2010 Specialized Business Valuation Workshop & Simulcast on Tuesday, October 19, 2010 at the Ford Motor Company Conference & Events Center in Dearborn. The following day – on October 20 – I will be reprising my half-day Seminar on the Healthcare Reform legislation for the Michigan Association, which will be updated to reflect the barrage of regulations that have been issued since June.

The Massachusetts Society has me asked me to present the Seminar on the Healthcare Reform again and that will take place on October 25 at a location to be announced, likely Framingham or Natick.

I’ll be presenting two sessions at the AICPA National Healthcare Industry Conference in Vegas this November. One session will deal with antitrust issues in transactions and negotiations between physicians, hospitals and networks, with a focus on the new Accountable Care Organizations (ACOs) as well as what can and cannot be shared with respect to fees and how it is accomplished. My co-speaker will be healthcare antitrust attorney Jim Reeder of Vinson and Elkins’ Houston office. The second session with my friend and colleague Tim Smith of Healthcare Appraisers will deal with Fair Market Value issues in healthcare valuation and compensation, again with a focus on ACO and other integration transactions. Time permitting, I hope to introduce a new Primary Care Compensation Model I am developing for the ACO market.

Finally – for now – I’ll be speaking at the AICPA National Valuation Conference in Washington DC. I’ll be sharing the session with my friend and colleague Carol Carden of Pershing Yoakley, who is also Chair of this year’s Conference. The topic is Factors in Forecasting Cash Flow and Estimating Cost of Capital in Healthcare and will be based upon our joint paper in the June 2010 issue of Business Valuation Update.

BVR's Guide to Physician Practice Valuation

July 10th, 2010 | Posted by Mark Dietrich in - (Comments Off on BVR's Guide to Physician Practice Valuation)
BRV's Guide to Healthcare Valuation

The new edition of BVR’s Guide to Physician Practice Valuation available in June is the essential resource for understanding the complexities inherent in physician practice valuation, whether for sale to a hospital, private equity firm or to another physician.  The Second Edition contains nine additional chapters and revisions to six existing chapters?  Among the new chapters is one addressing traditional practice buy-ins and buyouts as well as how the presence of noncompete agreements affects value.  Another deals with the actual valuation of noncompete agreements and personal goodwill, the key to many litigation engagements as well as tax planning associated with conversion of C Corporations to S Corporations or to tax-exempt status.

Mark Dietrich and other top healthcare appraisal experts deliver current and comprehensive “how-to” guidance on valuation approaches.  Learn how the Anti-Kickback Statute and Stark Law impact your valuation in a completely updated chapter.  A related new chapter devoted to the Bradford Regional case analyzes the risks of being unfamiliar with the regulatory construct as does another new chapter on measuring intangible value in physician practices co-authored by the industry’s most experienced healthcare valuation experts.  Various chapters explore the not so subtle nuances of valuing a physician practice, including coding analysis, ancillary technical component revenue, “incident to” billing for midlevel providers, valuing accounts receivable and benchmarking and normalization of expense.

Practical guidance coupled with adherence to professional and regulatory standards define the 2012 Guide to Physician Practice Valuation.

https://www.bvresources.com/bvstore/book.asp?pid=PUB235

I'll be leading a 4 hour seminar on the Healthcare Reform legislation, sponsored by the Mass Society of CPAs, on June 4. For location and registration information, visit www.mscpaonline.org.  This post contains links to various sources of additional information that attendees or others may find interesting.

After spending something north of 40 hours in the past several weeks studying the legislation and learned commentaries thereon, coupled with north of 30 years working in the industry, I feel ready for this undertaking.(!)

My BLOG Posts on Reform before the legislation passed are located here
http://cpanet.typepad.com/cpanet/healthcare-reform/#tp
On Medicare Advantage
http://cpanet.typepad.com/cpanet/2009/09/a-closer-look-at-medicare-advantage.html
On self-insuring employers – a MUST read!
http://cpanet.typepad.com/cpanet/2009/07/self-insurance-vs-health-insurance.html

Additional Sources of Information:

CBO letter to Congressman Lewis stating that "discretionary" costs in the range of $115 billion necessary to administer the Reform legislation were not included in the scoring of the legislation. This will increase the deficit and eliminate any claimed reduction in same.
http://www.cbo.gov/ftpdocs/114xx/doc11490/LewisLtr_HR3590.pdf

American Medical Association study of insurer market concentration http://www.ama-assn.org/amednews/2010/03/08/bil20308.htm, http://www.southernstudies.org/AMA%202007.pdf

Centers for Medicare and Medicaid 2009 Statistics containing detaled infromation about Medicare recipients, physicians, etc.
http://www.cms.gov/ResearchGenInfo/02_CMSStatistics.asp

Barclays Capital Managed Care Industry Analyst Joshua Raskin, one of most insightful individuals on Health Insurance and Medicare Advantage. Reports are available through brokerages such as Fidelity.

Health Affairs podcast of a webinar they did with four former CMS officials, including Bruce Vladek, Tom Scully and Gail Walensky, on CMS and Reform
http://www.healthaffairs.org/issue_briefings/2010_04_09_cms/2010_04_09_cms.php

FTC/DOJ July 2004 White Paper on Anti-Trust issues in the Healthcare Industry.
http://www.ftc.gov/reports/healthcare/040723healthcarerpt.pdf

Tax Foundation Analysis: Health Care Reform: How Much Does It Redistribute Income?
http://www.taxfoundation.org/files/ff222.pdf

Law Firm Sonnenschein Summary, with an excellent topical summary of affected areas.
http://www.sonnenschein.com/docs/Health_Care_Reform_Side-by-Side.pdf

Kaiser Family Foundation on Reform, perhaps the best summaries of all non-tax aspects of the legislation.
http://healthreform.kff.org/ (generally)
The Best Summary!
http://www.kff.org/healthreform/upload/8061.pdf

Kaiser Family Foundation Subsidy Calculator where you can determine the government subsidy to individuals to purchase insurance
http://healthreform.kff.org/Subsidycalculator.aspx

Kaiser Family/Alliance for Health Reform Podcast on Private Insurance Changes, a superbly done summary of what the insurance reforms really mean.
http://www.kff.org/healthreform/ahr043010video.cfm

Controlling Health Care Spending in Massachusetts: An Analysis of Options
http://www.mass.gov/Eeohhs2/docs/dhcfp/r/pubs/09/control_health_care_spending_rand_08-07-09.pdf

Benefits firm Hewitt Associates' announcement of the results of their survey of companies taking advantage of a $5 billion Early Retiree Reinsurance Program in the Reform legislation to pay the cost of early retirees age 55-64.
http://www.hewittassociates.com/Intl/NA/en-US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=8475

Extract of the Reform legislation on the 10% Primary Care Bonus to be paid by Medicare for the 5 years 2011-2015 on defined E&M codes (99201-99215,99304-99340,99341-99340) and other related extracts.
http://www.stfm.org/Sec%205501-%20Primary%20Care%20Bonus%20Payment1.doc
http://www.stfm.org/advocacy/issues/reform.cfm

Discussion of the temporary increase in Primary Care payments for Medicaid patients to Medicare rates in 2013 and 2014.
http://www.kaiserhealthnews.org/Stories/2010/April/06/Medicaid-Expansion-And-Payment-Increase-Causes-Mixed-Feelings-For-MDs.aspx

I will be posting additional resources here for the May 12 webinar

CBO letter to Congressman Lewis stating that "discretionary" costs in the range of $115 billion necessary to administer the Reform legislation were not included in the scoring of the legislation. This will increase the deficit and eliminate any claimed reduction in same.
http://www.cbo.gov/ftpdocs/114xx/doc11490/LewisLtr_HR3590.pdf

American Medical Association study of insurer market concentration http://www.ama-assn.org/amednews/2010/03/08/bil20308.htm, http://www.southernstudies.org/AMA%202007.pdf

Centers for Medicare and Medicaid 2009 Statistics containing detaled infromation about Medicare recipients, physicians, etc.
http://www.cms.gov/ResearchGenInfo/02_CMSStatistics.asp

Barclays Capital Managed Care Industry Analyst Joshua Raskin, one of most insightful individuals on Health Insurance and Medicare Advantage. Reports are available through brokerages such as Fidelity.

Health Affairs podcast of a webinar they did with four former CMS officials, including Bruce Vladek, Tom Scully and Gail Walensky, on CMS and Reform
http://www.healthaffairs.org/issue_briefings/2010_04_09_cms/2010_04_09_cms.php

FTC/DOJ July 2004 White Paper on Anti-Trust issues in the Healthcare Industry.
http://www.ftc.gov/reports/healthcare/040723healthcarerpt.pdf

Tax Foundation Analysis: Health Care Reform: How Much Does It Redistribute Income?
http://www.taxfoundation.org/files/ff222.pdf

The link for the webcast on May 12 can be viewed here on the home page of cpa2biz ttp://www.cpa2biz.com/ and the detail here http://www.cpa2biz.com/AST/Main/CPA2BIZ_Primary/Tax/Planning/PRDOVR~PC-WBC10057I/PC-WBC10057I.jsp?cm_sp=Homepage-_-SlideShow-_-Slide1

I'll be one of the three panelists on the American Institute of CPAs national webinar on the Healthcare Reform legislation on May 12. We'll be looking at the historical backdrop for the legislation, new benefit requirements, impact on healthcare providers, impact on small business and CPAs advising them, and the array of new taxes required to fund the legislation.  Meanwhile, let me say that the Kaiser Family Foundation website has a wonderful collection of white papers analyzing various aspects of the legislation.  Also, Health Affairs has a podcast of a webinar they did with four former CMS officials, including Bruce Vladek, Tom Scully and Gail Walensky, on CMS and Reform – fascinating.

http://www.healthaffairs.org/issue_briefings/2010_04_09_cms/2010_04_09_cms.php

Health Affairs, one of the Best Sources for analysis, in a reasonably unbiased fashion,  of Healthcare in general and Reform in particular, just released this Brief entitled Individual Responsibility. Read it here.

http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=11

From their website (and this is a pretty fair statement)

"Health Affairs is the leading journal of health policy thought and research. The peer-reviewed journal was founded in 1981 under the aegis of Project HOPE, a nonprofit international health education organization."

I would encourage all my colleagues and anyone with a serious or even passing interest in Healthcare Reform to subscribe and support this Project Hope mission.