What does “fair market value” mean in physician compensation?

Fair market value (FMV) represents the compensation that would be paid between a willing buyer and seller, neither under compulsion, both knowledgeable of the relevant facts. In healthcare, FMV ensures payments reflect legitimate business considerations without influencing clinical decision-making.

Why is FMV analysis critical for healthcare organizations?

Healthcare organizations must demonstrate that physician compensation arrangements are consistent with FMV and commercially reasonable to comply with federal laws such as the Stark Law and Anti-Kickback Statute. A proper FMV analysis protects both the organization and its providers from regulatory and financial risk.

What types of compensation arrangements require FMV opinions?

FMV opinions are essential for arrangements such as medical directorships, call coverage, employment agreements, management services, and co-management relationships. Each requires specialized valuation to confirm compliance and fairness.

How does PYA conduct physician compensation valuations?

PYA’s multidisciplinary valuation team applies professional judgment—supported by market data, benchmarks, and deep healthcare knowledge—to each engagement. Rather than simply calculating a number, PYA forms an informed opinion of fair market value based on human analysis of all relevant facts and circumstances. Every opinion reflects thoughtful consideration of both compliance and real-world market dynamics.

What distinguishes PYA’s physician compensation services from other firms?

PYA’s difference lies in its human intelligence and professional touch. Our experts combine decades of valuation experience with a hands-on review of every engagement, ensuring each FMV opinion reflects both technical rigor and market insight. As a privately owned and fiercely independent firm, we answer only to our clients—helping healthcare organizations structure compliant, practical, and patient-centered compensation arrangements.

Fair Market Value (FMV) Opinions for Healthcare

Fair Market Value (FMV) Opinions for Healthcare Arrangements

Healthcare organizations need fair market value (FMV) opinions that stand up to scrutiny. PYA helps organizations analyze and document arrangements by providing independent, third‑party fair market value (FMV) and commercial reasonableness (CR) opinions that support compliance with the Stark Law, the Anti‑Kickback Statute, and related regulations. PYA’s comprehensive understanding of the healthcare regulatory environment, combined with specialized technical expertise, helps organizations navigate affiliations, transaction planning and execution, and financial and regulatory reporting needs.

FMV Opinions for Provider and Healthcare Services Arrangements

Fair market value (FMV) opinions are needed when healthcare organizations structure, renew, or modify arrangements involving physicians, other healthcare professionals, or transactions between or among entities.

PYA provides independent FMV and commercial reasonableness opinions for a broad range of healthcare arrangements.

Physician employment and professional services agreements (PSAs)
Medical directorships and administrative services
On‑call and call coverage compensation
Financial subsidies
Income guarantees
Academic teaching arrangements
Value-based arrangements
Key opinion leaders (KOLs) and healthcare professionals (HCPs)
Clinical co‑management and gainsharing arrangements
Clinical trial and research arrangements
Executive compensation
Laboratory services arrangements
Management services arrangements and management services organization (MSO) structures
Managed care services arrangements
Marketing Services Arrangements
Non-monetary compensation
Staff leasing

Each FMV opinion is based on the specific facts and circumstances of the arrangement, recognizing that market value cannot be determined by formula or percentile alone.

Fair Market Value Methodology Built for Regulatory Review

PYA applies a fact‑driven, multi‑approach valuation methodology consistent with professional valuation standards and regulatory guidance. Our analysis does not rely solely on survey benchmarks and is tailored to the unique characteristics of each arrangement.

PYAClearView™ FMV

PYA ClearView™ is a technology-enabled FMV workflow that modernizes how healthcare organizations request, receive, and manage fair market value opinions. ClearView™ represents the next generation of FMV support as a model that uses modern tools to accelerate analysis while relying on qualified valuation professionals to form and defend the ultimate opinion.

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ClearView™ MODEL