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Fair Market Value Resources

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Infectious diseases (ID) physicians serving as infection prevention or antimicrobial stewardship medical directors must receive reimbursements that are consistent with the fair market value (FMV) of their services. As defined by the physician self-referral law ("Stark") law, fair market value is "the value in arms length transactions, consistent with the general market value" of your services. This means that ID physicians in consultation with their hospitals are free to establish reimbursement levels that are consistent with the market value of their services in a given areaThis document provides an overview of FMV, Stark law, and other terms seen in contracting for physician services.


IDSA has long argued that, at a minimum, ID medical directors' reimbursements should account for the overhead costs required to maintain their practice. The following is an example of a reimbursement formula that can be used as a starting point in negotiations with your hospitals:


Median Gross Charges 
(or Collections) per Year

2000 Hours


Once a reimbursement formula and a data source have been identified, it is up to the individual ID physician to make the case for his/her value. Cultivating relationships with your hospital administrators based on trust, mutual respect, and proven results are the best way to ensure that your infection control reimbursements are commensurate with your value. It also is helpful to remember a few negotiating strategies that have been successfully used by your colleagues.

In September 2017, The Value That Infectious Diseases Physicians Bring to the Healthcare System, was published in the Journal of Infectious Diseases (JID). The article provides a compendium of data sources that ID specialists can use in demonstrating their value to hospital administrators during contract negotiations. 

Finally, a presentation on how to negotiate infection control contracts were given at the 2009 Clinical Practice Meeting. The presentation was presented as a point-counterpoint from a physician's standpoint

Fiction. Hospitals often cite two "voluntary" reimbursement methodologies that the Department of Health and Human Services (HHS) deemed as safe harbors for the purpose of meeting fair market value. HHS' withdrew these reimbursement methodologies as safe harbors in August 2007 largely due to a lawsuit filed by the Renal Physicians' Association and supported by the IDSA and several other medical specialty societies.

Below are the withdrawn safe harbor methodologies for calculating fair market value hourly payment rates for physicians serving as medical directors:

Methodology 1

The hourly payment for a medical director cannot exceed the average hourly rate for emergency room physician services in the relevant physician market, provided there are at least three hospitals providing emergency room services in the market.

Methodology 2

The hourly payment for a medical director is calculated by averaging the 50th percentile salary for the physician's specialty of four national salary surveys and dividing the resulting figure by 2000 hours to establish an hourly rate. The CMS rule provides a choice of six recognized, readily available surveys.

Hospitals often used these payment methodologies as a justification to reduce the payments for the services of infection control medical directors by as much as 50 percent (e.g., from $150 per hour to $85-95 per hour). Be wary of hospitals that continue to cite these withdrawn safe harbors in an effort to limit your reimbursements.

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