Navigating fair market value as an independent or locum tenens physician

Health care attorney Dennis Hursh discusses his article, "What independent and locum tenens doctors need to know about fair market value." Dennis explains why understanding fair market value (FMV) is crucial for independent and locum tenens physicians, not only for securing appropriate payment but also for ensuring compliance with federal laws like the Stark Law. He breaks down the Stark Law's definition of FMV as compensation arising from bona fide bargaining between well-informed parties not in a position to generate business for each other, and introduces the vital concept of "commercial reasonableness"—meaning an arrangement should make sense for the parties' goals, even if not directly profitable for the hospital regarding that specific physician's services. Dennis provides a practical method for locum physicians to estimate their minimum acceptable rate by calculating the total hourly cost of an equivalent employed physician, factoring in salary, benefits (typically 20 to 30 percent of compensation), paid time off, and amortized bonuses, offering a family medicine physician example where this cost exceeds $216 per hour. He advises locums to consider situational factors like a hospital's urgent need or difficulty in recruitment as leverage, and to proactively research and ask insightful questions to ensure their contributions are properly valued.

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