Becker's ASC Review

38 TRANSACTIONS The next 3 hot spots for surgery center growth By Laura Dyrda T he number of ASCs in Florida and Texas have grown rapidly in the past five years due to an increased demand for elective surgery and a favorable regula- tory environment. Last year, Florida added 28 ASCs and Texas added 23. Metropolitan areas in both states are becoming saturated with surgery centers, so physician owners and future developers are looking eagerly at a few new emerging markets with huge potential for growth. North and South Carolina e environment in both Carolinas is ripe for an ASC explosion over the next few years. Both have a growing population as former city dwellers flocked to the region during the pandemic, when workers went fully remote, as a destination that offered some comforts of city life in addition to a variety of outdoor activities. Neither state is saturated with surgery centers either due to certificate of need laws. North Carolina has 1.32 ASCs per capita aer adding nine last year, and South Carolina has 1.41 ASCs per capita with the addition of two centers in 2021. Hospitals have a history of challenging new surgery centers or expansions in the state, but the tides could be turning. e South Carolina Senate voted to eliminate its certificate of need program in January and sent the bill to the House. Last October, North Carolina Court of Appeals Judge Richard Dietz questioned the basic premise of the state's certificate of need law during oral arguments in an ASC case. North Caro- lina also issued more favorable decisions for ASCs, approving multiple expansions and new centers last year. New York e Big Apple is quietly preparing for a shi in the healthcare landscape. For years, New York was considered one of the most challenging states for new ASCs, and even the nation's biggest chains stayed away. e market was so challenging that it had just around 0.82 ASCs per capita in 2021. However, insurers in the state are changing the game by directing more patients to ASCs for outpatient surgery. Last year, Empire BlueCross BlueShield in New York updated its coverage policy for several outpatient procedures, requiring medical necessity re- views if surgeons want to perform the cases in a hospital outpatient department instead of an ASC. e payer's goal is to drive more members to lower-cost ASCs. New York has certificate of need laws that have been restrictive in the past, but the pandemic highlighted the need for more hospital alternatives. Last year, New York added at least 19 ASCs. e only states to add more centers in 2021 were, of course, Texas and Florida. n USPI paid $78M for Compass Surgical Partners ASCs By Laura Dyrda D allas-based United Surgical Partners Internation- al spent $78 million to acquire the ownership of eight Compass Surgical Partners ASCs last year, USPI's parent company Tenet Healthcare revealed dur- ing the company's 2021 earnings call Feb. 8. When the deal closed Nov. 3, USPI didn't disclose terms of the sale, which added ASCs in Florida, North Carolina and Texas to its portfolio. Six days later, Tenet acquired SurgCenter Development for $1.1 billion, which added 85 ASCs to its network. The Compass Surgical Partners deal took a back seat to the SurgCenter Development deal, but added impor- tant strength to USPI's footprint in three Southern states. USPI added more than 200 ASCs to its portfolio at the end of last year, growing to more than 430 ASCs all together. USPI also has a steep growth trajectory, planning to add more than a hundred centers in the next few years to hit 600 ASCs by 2025. n IRA Capital gets $80.7M for ASC real estate acquisitions By Marcus Robertson P rivate equity firm IRA Capital landed $80.7 million in financing from First Citizens Bank for ASC property acquisitions in Florida and Louisiana. A three-story surgical hospital in Naples, Fla., accounted for $49.2 million of the total, according to a Feb. 16 news release. The property is 86,287 rentable square feet, and it is leased to Naples Community Hospital and Physicians Regional Medical Center. The remaining $31.5 million funded a portion of IRA Capital's acquisition of the 83,631-rentable-square-foot Christus Central Louisiana Surgical Hospital in Alexandria. "We are excited to add these two best-in-class surgical facilities backed by top-tier health systems to our growing healthcare real estate portfolio," IRA Capital principal and co-founder Amer Kasm said in the news release. The financing was provided by CIT, which was folded into a division of First Citizens Bank after a merger in January. n

• Cover