CPA.net

Seminar Reminder

In the only offering of the year, I will be teaching my all-day course Understanding & Valuing the Medical Practice on September 13, 2007 in Phoenix for the Arizona Society of CPAs.

If you would like to attend but are unable, you can e-mail me about purchasing my course materials along with the current version of the Chapter on valuing medical practices from my book. The book is sold out, but I am working on the third edition and hope to have it available sometime in the Fall of 2008.

The Grand Illusion!

A song by the super-group Styx in the 70's lives on in spirit in the valuation world today, both in the market approach and the income approach. During my abbreviated "concert" tour this year in Phoenix (September), Las Vegas (November) and New Orleans (December) I'll be rolling out the shortcomings of market data and the industry risk premium in healthcare.

In another historical crossover between Rock and Valuation, November 2007 is "10 Years After" the Balanced Budget Act of 1997 - and there is clearly no "goin' home." 2007 is also the 10 year anniversary of my 1997 national tour of 24 cities (with Atlanta counted twice). Flying was a lot more fun in those days, and USAir even held the final flite to Boston out of Pittsburgh for me one night at close to 10 PM as I arrived 45 minutes late from Nashville. Yet again, today there would be no "goin' home." I'd be lucky to get a cot on the terminal floor...

Delaware Open, Caracci

My article on the Delaware Open MRI case came out yesterday in Business Valuation Review. The article I wrote with Ken Patton of Mercer Capital on the Caracci case will be in the September edition of Valuation Strategies. I was blessed with excellent editorial comments on both pieces and I believe they are well worth the read. I will be addressing the topic matter of both articles in my appearances at the Arizona Society BV Conference this September and the AICPA Healthcare Conference in November and Business Valuation Conference in December.

Inaugural Presentation of Valuing Goodwill Course

My first presentation of the 8 CPE hour version of my course on valuing goodwill and noncompete agreements was favorably received, with participants giving me a 4.8 score for knowledge on the 5.0 scale.

Caracci case

I heard today that the article I wrote on the Caracci case with Ken Patton of Mercer Capital will be published in an upcoming edition of Valuation Strategies, where I have published previous articles on S Corp valuation and the Intermediate Sanctions provisions of the Internal Revenue Code. This completes the 4-bagger (today being Red Sox opening day) of articles described in my previous post.

Articles

I am pleased to report that I received confirmation that my article entitled A Healthcare Appraiser Reviews a Judge-Appraiser's "Report" will be published in the Summer 2007 edition of Business Valuation Review.  This article takes an entirely different look at last Spring's Delaware Open MRI decision, focusing on errors in the assumptions in the income approach, including use of the industry risk premium and terminal growth rate. BVR uses a blind peer review system and the article was extensively re-written and improved as a result of the hard work of the editorial review board, to whom I am grateful.

The BVR article, along with the article I co-authored on the Caracci case, which has been favorably received but not yet accepted, represent the culmination of two years of work on clarifying  the correct application of the income approach in the healthcare industry and exposing weaknesses in the market approach. The two other works: Medical Practices: A BV Rx in the November 2005 Journal of Accountancy and Identifying Appropriate Valuation Approaches under Stark and the AKS in the December 2006 edition of the American Bar Association's Health Lawyer were also subject to intensive editorial review and re-write. 

Taken as a whole, the four pieces present a comprehensive framework for identifying common errors and correct approaches in healthcare industry valuation.

2007 Seminar Appearances, Articles

I am pleased to report that I have been invited to speak at the AICPA's 2007 Business Valuation Conference in New Orleans. This marks my fifth invitation in the last nine years, including two sessions at the 2005 Conference. I have also been invited to speak at the 2007 National Healthcare Industry Conference (Las Vegas) for the fourth consecutive year.

I will be speaking with attorney Katherine Lauer of Latham Watkins, LLP at the Healthcare Compliance Association meeting in Chicago on April 24 on the topic of Fair Market Value Defense under the Stark Laws and Anti-Kickback Statute.

I will be teaching my course on the tax and valuation aspects of valuing goodwill and noncompete agreements on June 6 in the Boston area for the Mass. Society of CPAs.

I will again be speaking to the marital bar at the Mass Continuing Legal Education seminar Enhancing Your Financial IQ on July 25.

On September 12, I will be speaking at the Arizona Society of CPAs BV Conference in Phoenix for the second time and on the 13th I will be teaching my 8 CPE hour course on valuing medical practices in Phoenix as well.

I recently completed an in-depth article on the Caracci case with a co-author, featuring a point-counterpoint analysis of the valuation issues. Once it has been accepted for publication, I will post the announcement here.

Medical Practice Valuation Guidebook Availability

There are fewer than 10 copies of my book remaining in inventory - it has been selling very well as of late. I regret that a new edition will not be available any earlier than 2008.

February 8 Teleseminar

The panel yesterday received a number of good questions, observations and critiques from participants during and after the call-in.  One comment directed my way was on the use of replication cost outside the physician to physician transaction area. I believe this is thoroughly addressed in my article in the current edition of Financial Valuation and Litigation Expert. The law always trumps what would otherwise be considered good appraisal practice - as USPAP specifies, for example, for jurisdictional exceptions.

On Delaware Open, I should at least clarify that I think the Judge and prevailing expert got it wrong on the discount rate, growth and per unit reimbursement. A forthcoming article will make this more than clear!

Financial Valuation and Litigation Expert

My article on replication cost in physician practice valuation should be available shortly in the February/March Edition of Valuation and Litigation Expert.