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Stark Law Reform Debated by Senate Committee
During the summer of 2016, the U.S. Senate Finance Committee (Committee) has debated changing the standard of fair market value and the threshold of commercial reasonableness as part of a larger discussion of potential modifications to the Stark Law. Through releasing a whitepaper and administering a committee hearing on the issue, certain members of the Senate have publicized their intention to explore the efficacy and composition of the Stark Law, particularly in light of the impending implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Ranging from complete repeal of the Stark Law, to the creation and/or expansion of waivers and exceptions to the law, the suggested changes discussed by the Committee may have a significant impact on regulatory compliance efforts by healthcare organizations. Due to the prominent role held by valuation professionals to determine fair market value and commercial reasonableness for many arrangements within the healthcare industry, changes to these thresholds may have a noteworthy impact on the work of these experts. This Health Capital Topics article will discuss the suggested changes to the Stark Law highlighted by the Committee, as well as examine the significance of the Committee's interest in changing the law and the implications that these potentially major changes may have on industry stakeholders, including valuation professionals.

During the summer of 2016, the U.S. Senate Finance Committee (Committee) has debated changing the standard of fair market value and the threshold of commercial reasonableness as part of a larger discussion of potential modifications to the Stark Law. Through releasing a whitepaper and administering a committee hearing on the issue, certain members of the Senate have publicized their intention to explore the efficacy and composition of the Stark Law, particularly in light of the impending implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Ranging from complete repeal of the Stark Law, to the creation and/or expansion of waivers and exceptions to the law, the suggested changes discussed by the Committee may have a significant impact on regulatory compliance efforts by healthcare organizations. Due to the prominent role held by valuation professionals to determine fair market value and commercial reasonableness for many arrangements within the healthcare industry, changes to these thresholds may have a noteworthy impact on the work of these experts. This Health Capital Topics article will discuss the suggested changes to the Stark Law highlighted by the Committee, as well as examine the significance of the Committee's interest in changing the law and the implications that these potential changes may have on industry stakeholders, including valuation professionals. (Read more...) 
The Pharmacy Benefits Management (PBM) sector of the healthcare industry may soon experience substantial shifts in market power, propelled in large part by recent lawsuits implicating one of the largest PBM organizations, Express Scripts, Inc. (ESI). On March 21, 2016, Anthem, Inc. (Anthem) filed suit against ESI, alleging that ESI breached conditions in the Amended Restated Pharmacy Benefit Management Services Agreement (Agreement) between the companies related to the negotiation of "competitive benchmark pricing" for PBM services and products, which Anthem alleges amount to a $13 billion difference between current rates and market rates. Upon receiving news of the Anthem-ESI lawsuit, shareholders of ESI filed suit against the PBM giant, claiming that ESI misrepresented its relationship with Anthem and that ESI's lawsuit with Anthem led to a "precipitous decline" in ESI's stock, causing economic damages to shareholders. This two-part Health Capital Topics series will examine the PBM industry, the recent lawsuits filed against ESI, and the ramifications of such lawsuits for both ESI and the PBM industry as a whole. This first installment will discuss the background of the PBM industry and the recent litigation surrounding ESI. (Read more...) 
The closures of over two-thirds of the 23 original Consumer Operated and Oriented Plans (CO-OPs) created under the Patient Protection and Affordable Care Act (ACA) have negatively impacted access to health insurance for many individuals, and have caused disruptions within the health insurance markets previously served by the plans. Due to market-based factors (e.g., competition from larger health insurers) and legislative factors (e.g., the risk adjustment program), the struggles of many CO-OPs have left numerous individuals and small markets without adequate access to, and competition for, health insurance. Additionally, the implementation and enforcement of the ACA's risk adjustment program has prompted certain CO-OPs to file suit seeking to delay payment of, or receive payment for, monies owed under this program. Although non-ACA specific factors have contributed to the struggles faced by many CO-OPs, the volatility of the CO-OP program may nevertheless represent a hurdle for government regulators to overcome in the ACA's overall effort to improve access to, and competition in, the health insurance market. This second installment of the two-part Health Capital Topics series on ACA CO-OPs will discuss the implications of the CO-OP struggles on the broader health insurance market and how, if at all, these closures reflect on insurance reforms under the ACA. (Read more...)
This second installment of the six-part Health Capital Topics series on various statistical methods utilized by valuation analysts will provide a brief overview of descriptive statistics and their utilization in various valuation techniques and methodologies. Descriptive statistics may prove imperative in healthcare valuation analyses, as evidenced by their usage in U.S. ex rel. Drakeford v. Tuomey Healthcare System, Inc., in which Kathleen McNamara, CPA, the government's expert witness in the case, determined that the productivity of physicians employed by Tuomey fell below the 75th percentile, while their compensation exceeded the 90th percentile. Such determination contributed to her opinion that Tuomey paid the physicians at issue in the case in excess of fair market value, and relied heavily on descriptive statistics. (Read more...)

HCC CEO Bob Cimasi Recognized as a "Pioneer of the Profession" under NACVA's "Industry Titans" Awards
 HCC CEO Robert James Cimasi, MHA, ASA, FRICS, MCBA, CVA, CM&AA, has been named a "Pioneer of the Profession," by the National Association of Certified Valuators and Analysts (NACVA) and Consultants Training Institute (CTI) as part of their Silver Anniversary recognition luncheon of valuation "Industry Titans," held on June 10, 2016, during their 25th Annual Conference in San Diego.  Mr. Cimasi joins valuation profession luminaries, including: Dr. Shannon P. Pratt, Chris Mercer, James R. Hitchner, Roger J. Grabowski, Richard Wise, Jay E. Fishman, Nancy Fannon, Honorable Judge David Laro, Howard Lewis, and Mel H. Abraham, along with fourteen others, in receiving this honor. Congratulations to Bob Cimasi and his fellow "Pioneer of the Profession" honorees from the HCC Team and Topics Staff!