FMV Challenges & Defensibility Strategies in Surgical First Assistant Arrangements

The following article was originally published by the American Association of Provider Compensation Professionals.

While healthcare organizations routinely conduct fair market value (FMV) reviews, surgical first assistant arrangements often present unique valuation and compliance challenges that are not easily addressed through traditional FMV methodologies, which and can make it difficult to rely solely on standard compensation benchmarks when assessing FMV.

As a result, organizations evaluating these arrangements must often look beyond traditional survey data and incorporate operational realities, recruitment challenges, staffing alternatives, and other qualitative factors into their analyses. For the unique FMV challenges associated with surgical first assistant arrangements, there are practical strategies organizations can use to strengthen defensibility, support commercial reasonableness, and maintain compliance when entering into and monitoring these arrangements.

Understanding Surgical First Assistant Arrangements

Surgical first assistant arrangements are used by hospitals, ambulatory surgery centers (ASCs), and physician organizations to maintain operating room efficiency, support procedural volume, and address evolving staffing needs. These arrangements may involve physician assistants (PAs), nurse practitioners (NPs), registered nurse first assistants (RNFAs), certified surgical first assistants (CSFAs), and certified surgical assistants (CSAs) that provide intraoperative support under the direction of a surgeon. Responsibilities include tissue handling, exposure, hemostasis, suturing, and other activities that support the surgical procedure.

Organizations often use several compensation and arrangement structures:

• Direct Employment: The hospital, health system, or physician practice employs the surgical first assistant as a full-time or part-time employee.
• Independent Contractor Arrangements: Individual providers contract directly with the organization through a professional services agreement (PSA), with hourly, daily, per-case, or coverage-basis compensation.
• Third-Party Service Providers: Organizations contract with a third-party staffing company or aggregator that supplies surgical first assistant services across multiple facilities.

Compensation structures vary significantly and may include hourly rates, shift-based payments, per-case fees, and annual salaries, or combinations thereof. While these arrangements can address operational needs, they often create challenges when determining and documenting FMV.

Key FMV Challenges

Limited Market Benchmarking Data

One of the most significant challenges in valuing surgical first assistant services is the limited availability of reliable market compensation data. Traditional compensation surveys often focus on physicians and advanced practice providers (APPs) and may not provide meaningful benchmarks for CSFAs, CSAs, RNFAs, or specialty-specific first assistant services.

Even when survey data exists, the sample sizes are often small and may not distinguish between provider types or surgical specialties.

As a result, organizations often find that survey benchmarks alone provide insufficient support for FMV conclusions.

Variability in Experience, Training & Specialty Expertise

Not all surgical first assistants provide equivalent services. Compensation expectations may vary substantially based on:

• Years of surgical experience
• Specialty-specific expertise
• Certifications and credentials
• Ability to support complex surgical procedures

Additionally, independent contractor arrangements frequently involve a mix of provider types. A third-party staffing company may provide CSFAs, RNFAs, PAs, or other personnel depending on scheduling needs and case complexity. This variation makes it difficult to identify a single benchmark that appropriately reflects the services being provided.

Organizations must therefore evaluate not only the credentials of individual providers, but also the overall staffing model and level of expertise required to support surgical operations.

Productivity Measurement & Reimbursement Complexity

Unlike physician arrangements, surgical first assistant productivity is often difficult to measure using traditional work relative value units (wRVUs). Many organizations do not track wRVUs at the first-assistant level, and productivity reporting systems may not capture these services consistently.

Reimbursement presents additional complexity. While certain commercial payers may reimburse first-assistant services under specific circumstances, reimbursement policies vary significantly by payer, specialty, and provider type. Furthermore, Medicare reimbursement rules differ depending on the credentials of the first assistant and the procedure being performed, as only certain cases have approval for a first assistant at surgery to be reimbursed.

As a result, collections data may be incomplete, inconsistent, or unavailable, making it difficult to incorporate reimbursement into an FMV assessment.

Strategies to Improve FMV Defensibility

Given these challenges, organizations should adopt a comprehensive valuation approach that incorporates both quantitative and qualitative factors, rather than relying solely on benchmark surveys.

Document Required Experience & Specialty Expertise

Organizations should clearly document the necessary qualifications for each service.

Consider factors like years of experience, specialty training, certification requirements, and complexity of supported procedures.

This information can provide important context when evaluating compensation against available market benchmarks. For example, a highly experienced first assistant supporting complex cardiovascular, orthopedic, or neurosurgical procedures may reasonably command compensation above median benchmark levels because of their specialized expertise and the market’s limited supply.

Evaluate Alternative Staffing Options

A defensible FMV analysis should consider the organization’s available staffing alternatives and associated costs.

Organizations may compare:

• Employing a dedicated full-time provider
• Contracting with individual independent contractors
• Using a third-party staffing company
• Using per-case or as-needed coverage models

Reviewing multiple alternatives helps demonstrate that compensation decisions are based on legitimate business considerations, rather than provider preference only. Competitive bids from third-party suppliers can also provide valuable market evidence regarding the cost of obtaining comparable services.

Periodically Review Collections & Reimbursement

Although reimbursement opportunities may exist for certain first-assistant services, reimbursement policies are evolving. Organizations should avoid assuming current reimbursement levels will remain static over time.

Agreements should include provisions allowing periodic review of collections, reimbursement trends, and payer policy changes. This helps ensure total compensation remains commercially reasonable and providers are not receiving excessive aggregate compensation through a combination of hospital payments and professional collections.

Reassess the Arrangement Regularly

FMV is not a one-time exercise. Organizations should periodically evaluate whether the arrangement continues to meet operational needs and whether lower-cost alternatives have become available.

Consider the following questions:

• Has surgical volume changed?
• Have operating room staffing needs changed from when the arrangement was established?
• Would an employed model be more cost-effective now?
• Would an as-needed coverage model better align with utilization patterns?

Regular reviews support ongoing commercial reasonableness and demonstrate prudent stewardship of organizational resources.

Document Operational Need & Strategic Objectives

Compensation decisions should be supported by clear operational objectives, such as:

• Improving operating room efficiency
• Reducing procedure turnaround times
• Reducing surgeon burnout
• Enhancing patient care continuity
• Maintaining adequate staffing levels
• Expanding surgical capacity

Documenting these objectives establishes the legitimate business purpose underlying the arrangement and strengthens the overall FMV analysis.

Maintain Evidence of Recruitment Challenges

Labor market conditions often play a significant role in compensation decisions. Continuously document and preserve all documentation supporting recruitment difficulties, including:

• Length of time positions remain vacant
• Number of recruitment attempts
• Candidate shortages
• Declined employment offers
• Compensation expectations communicated by candidates

Evidence that positions could not be filled at median compensation levels may support the case for compensation above traditional benchmark levels when justified by market realities.

Conclusion

Surgical first assistant arrangements present unique FMV challenges, with limited survey data, provider variability, inconsistent productivity measurement, and evolving reimbursement policies. Consequently, organizations may struggle to accurately evaluate these arrangements against benchmark compensation data only.

Instead, a defensible FMV framework combines market data with operational realities, recruitment challenges, staffing alternatives, provider qualifications, and ongoing  utilization and reimbursement monitoring. Thoroughly documenting these factors can better support both FMV and commercial reasonableness, while ensuring continued access to essential surgical support services.

Surgical first assistant arrangements require an FMV approach that goes beyond traditional benchmarks. Connect with VMG Health to develop a defensible valuation grounded in market data, operational realities, and healthcare compliance.