• Mark Spurlin

Navigating FMV for telehealth during and after COVID-19


Telehealth has long been known to have the potential to be a major disruptor to the healthcare industry. Now, during one of the largest disruptions of our lifetime, it has shown its true potential by providing a temporary lifeline for patients and providers alike. In an effort to provide access to healthcare and maintaining continuity of care, the government has issued broad waivers temporarily reducing many of the hurdles that have limited the adoption and expansion of telehealth such as geographic restrictions, coverage and payment rates, state licensure, certain platform and HIPAA requirements, etc.


The temporary lifting of restrictions and the protections provided in the Stark Law and Anti-Kickback statutes, coupled with the continuum of care void created by the pandemic has led to a mad dash to provide telehealth services. In turn, this has created an urgent need to enter into various arrangements necessary to support telehealth services. Due to the emerging and evolving nature of the various telehealth services many physicians, hospitals, even large health systems find themselves navigating uncharted territories. And despite the temporary waiver, the long-term viability of these agreements requires regulatory compliance including fair market value compensation. With so much uncertainty, many clients are turning to valuation firms like Root Valuation to help with some of the truly unique challenges of marketing and pricing these services and products.


Some of the more daunting and unknown long-term challenges include:

  • Will any of the temporary provisions expanding coverage and access to telehealth services remain in place or become permanent after waivers are lifted?

  • What are the implications if they are not?

  • Will there be a lasting impact on patient demand and preferences?

  • How will care delivery models and practice patterns need to adapt?

  • How does/will the ability to practice across state lines impact FMV?

The safest course of action in light of this uncertainty is to assume Stark and Anti-Kickback regulations and enforcement will be reapplied as currently written. As such, we believe it is important that clients work with a valuator to develop sound logic and document their support for the pricing of temporary arrangements. Clients should also implement specific provisions to revisit these compensation structures and amounts once the waivers expire and the go-forward market and compliance considerations are known with greater certainty.

While it may be impossible to plan for all of the eventualities that may manifest once the pandemic is over, we believe this is a watershed moment for telehealth that will see sustained high demand for these services long after the pandemic subsides. In the near to mid-term telehealth will remain highly fragmented and inconsistent due to the multiple variables and parties involved, however, new technologies and increased capital investment will likely change not only telehealth, but the healthcare industry as a whole.


At Root Valuation we are committed to helping clients navigate the market and regulatory uncertainties through a consultative approach to valuation services. If your organization needs help navigating telehealth financial arrangements or help planning how the changes related to telehealth could impact your organization, please give us a call at 720.390.6673 or email us at info@rootvaluation.com.

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