What to consider when assessing fair market value of an ASC 

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ASCs must charge a fair market value for equity in an ASC, which can be difficult for a newer facility to calculate, Krieg DeVault, a lawyer from Meritas, wrote in a Nov. 12 Lexology article. 

Here are five things to know about equity investment: 

1.  A newly formed entity with no facility, no license and no payer contracts should be valued at significantly less than an ASC with even a short operating history.

2. Mr. DeVault recommends obtaining a formal valuation from an independent third-party valuation firm with specific experience valuing ASCs to avoid violating anti-kickback rules.

3. Some ASCs just pick an equity price that they find meaningful, Mr. Devault said. But if a competing facility charges something distinctly different, he wrote, it could trigger a government investigation. 

4. A below-fair-market-value arrangement sometimes forms out of habit or because of a concern that newer physicians may not be able to afford the buy-in. 

5. When a physician retires or stops using an ASC, there are no longer referrals from that physician back to the ASC, and so no kickback violations can occur. 

 

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