A regional health system sought an independent fair market value (FMV) and commercial reasonableness (CR) analysis to support the employment of a cardiothoracic surgeon (the Physician) with specialized robotic thoracic surgery expertise (Specialty) and multiple program leadership responsibilities.
Situation
The health system sought to align with a Specialty surgeon who provides complex Specialty services, including minimally invasive and robotic thoracic procedures. As part of its broader strategic initiative to modernize surgical services, the health system focused on the continued development of its robotic surgery program, including expansion of robotic thoracic capabilities to support complex, minimally invasive procedures and enhance access to advanced oncologic care.
The Physician also serves in several administrative leadership positions, including thoracic surgery medical directorship, thoracic robotic surgery leadership, and cancer liaison responsibilities. Given the Physician’s specialized clinical expertise and administrative responsibilities, the health system engaged VMG Health to assess whether the proposed compensation arrangement (the Arrangement) was consistent with FMV and CR based on the services provided.
Solution
VMG Health performed an independent FMV and CR analysis of the proposed Arrangement. The analysis included evaluating the Physician’s clinical compensation using national compensation survey benchmarks and productivity expectations for specialty physicians.
VMG Health also assessed compensation associated with the Physician’s administrative leadership responsibilities, including Specialty program oversight, robotic surgery leadership, and cancer program coordination. The analysis considered the scope of services provided, anticipated clinical productivity, and the Physician’s role in supporting the health system’s thoracic oncology and robotic surgery programs.
Success
VMG Health determined FMV compensation ranges for the Physician’s clinical and administrative services based on the specific facts and circumstances of the Arrangement. The analysis provided the health system with independent documentation to support the Arrangement.
The health system used the valuation analysis to support internal approval processes and to ensure regulatory compliance for the Arrangement.
