Healthscope was recently engaged by a healthcare attorney to evaluate a negotiated Management Services Agreement (MSA) between a private physical therapy (PT) company and a healthcare system looking to establish a new outpatient PT program in a satellite ambulatory location.

Our task: assess the fair market value (FMV) of the MSA’s compensation terms, which guaranteed the PT company a substantial fixed share of collected revenue—starting in Year 1.

The challenge? No pro forma data was available—no projections for service volume, revenue, operating expenses, or net income. In other words, the financial foundation needed to support a defensible FMV opinion was missing. That’s precisely why the attorney brought us in.

While decisions can be made without solid baseline data, they’re rarely sound—or legally defensible. The attorney understood that.

The Bigger Picture:
In clinical service line development, and in practice sales or acquisitions, success depends on more than just high-level revenue and expense estimates. You need a clear understanding of:

• Clinical hours and staffing models
• Referral sources and service volumes (by CPT code)
• Provider and non-provider compensation
• Capital requirements
• Detailed operating cost structures

In short: doing your homework matters.

Healthscope’s Role
We’ve helped hundreds of clients build and analyze the clinical and operational datasets essential to thousands of healthcare transactions. Our experience proves that investing time upfront in accurate, objective data pays off during planning, negotiation, and FMV determination.