Angie Caldwell, Consulting Principal, and Derek Long, Senior Manager, recently authored an article published by the American Association of Provider Compensation Professionals (AAPCP). The article, “Considerations for Valuing Post-Operative Services in Optometry Co-Management Arrangements,” examines the increased governmental scrutiny of financial and referral relationships between ophthalmologists and optometrists and the challenges in determining fair market value of the optometrist’s compensation for services to ensure compliance.
Caldwell and Long write, “As such, engaging in co-management arrangements where the ophthalmologist pays a fee to the optometrist may result in the existence of both financial and referral relationships between the ophthalmologist and optometrist. For that reason, these arrangements require compliance with the federal Anti-Kickback Statute (AKS), other federal regulations, and certain state laws (as applicable), or they risk liability for damages and penalties under the False Claims Act.”
They explain one way to ensure compliance is determining fair market value (FMV), which can be difficult due to the multiple variables involved in the arrangement. The authors share three potential solutions for determining FMV:
- The cost approach
- The optometrist cost build-up approach
- The reimbursement analysis approach
The full article was published in the June 19, 2024, issue of the AAPCP Bulletin, where it is available to AAPCP members and subscribers. View a PDF of the article.
This is the second in a 2024 series of PYA articles related to physician compensation design, planning, and valuation that will be published in the bulletin. Read PYA’s article from March 2024:
PYA leaders also published articles in the bulletin in 2023:
- Playing Offense: Using Compensation Design and Strategy to Retain Hospital-Employed Primary Care Physicians
- Understanding Group Compensation Model Design for Hospital-Employed Physician Practices
- Helping Hospitals Navigate Financial Assistance Arrangements to Secure Specialty Coverage in an Evolving Healthcare Landscape
The AAPCP is the largest nonprofit organization in the country devoted to provider compensation, contracting, and alignment. The organization’s members advise and lead organizations on provider compensation, contracting, planning, recruitment, retention, strategy, and valuation.
For additional guidance related to provider compensation design or any matter related to fair market value compensation, valuation, compliance, or strategy and integration, our executive contacts would be happy to assist.
