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Healthcare Industry E-Flash Expiration of Specialty Hospital Moratorium and Oversight Plan Will Impact Acute Care Hospital ValuesOn August 8, 2006, the Department of Health and Human Services (DHS) through the Centers for Medicare & Medicaid Services (CMS) announced their strategic plan for specialty hospitals. Among other features, the plan requires disclosure of physician investment and compensation arrangements, disclosure to patients when facilities have physician investors and changes to reimbursement mechanisms in an attempt to eliminate adverse financial incentives based on site of care. Specific attention will be given to investments that are deemed to have “non-proportional” returns associated with them. August 8, 2006 is also the day of expiration of CMS’ six month moratorium against issuing new provider agreements to specialty hospitals. Expiration of the moratorium opens the door for new specialty hospitals for the first time since November 2003. The expiration of the moratorium and implementation of the oversight plan impacts acute care hospitals in several significant ways. It is increasingly important to have a qualified valuation expert opine on investment and joint venture arrangements to help ensure the transactions withstand regulatory scrutiny. Additionally, the emergence of new specialty hospitals in a given community will have a significant impact on acute care hospital margins and valuations. It has never been more important to ensure the team of advisors possesses technical as well as industry expertise. At ValuePoint Consulting Group, our team of professionals have a wealth of experience appraising healthcare entities and joint venture transactions. If you would like a copy of the DHS press release or need assistance with a healthcare appraisal issue, please contact Carol Carden at (865) 558-8118 or ccarden@valuepointconsulting.net. For more information about ValuePoint, please visit our website at www.valuepointconsulting.com. ValuePoint Consulting Group, LLC
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