Becker's ASC Review

10 nies. Overall the ASC industry's growth will be modest but those that have aligned themselves will prosper." 10. Surgery centers at some point might employ physicians. is may be an offensive or defensive effort. ere are certain ASC companies that employ physicians. is may become a trend if ASCs or companies per- ceive there is no choice and there continues to be a decrease in the number of independent physicians otherwise available to invest in surgery centers. Mr. Lambert says, "For the past 40 years, the surgery center industry was largely built by physician entrepreneurs. ey put their capital at risk to bet- ter serve the patients, improve their productivity and create an additional source of income. While patients could directly appreciate the dramatic cost savings and higher quality care they received in ASCs these physician-driven ventures were largely unappreciated by hospitals, regulators and payers." As independent physicians become less available to build and use ASCs, com- panies may increasingly employ physicians. is is not a clear trend as of yet. 11. Geography remains critical to success. e area of the country that an ASC is in remains critical. In some communities, there are either (1) minimal or substantial independent physicians, (2) a presence of CON law, (3) there may or may not be an interest in joint ventures by the local hospitals, or (4) there is a great deal of hospital employment or not. Finally in many markets, there may be excellent or poor market reimbursement as well as extensive or limited payer control. 12. Legal. From a legal perspective, there are a handful of issues that drive the greatest amount of attention for surgery centers. ese include issues like redemptions of physicians, enforcement of non-competes, compliance with safe harbors and other financial relationships with physicians. In addition, the following issues also have great impact on surgery centers: the price at which you can sell shares to physicians, anesthesia relationships between ASCs and their physicians, the use of pathology labs specifically by GI-driven surgery centers, the compliance with HIPAA and data privacy rules and labor and employment issues. Finally, there is generally more time spent on health- care compliance, and billing and coding issues and audits than ever before. As to legal issues, the industry has seen several false claims cases related to the pricing of shares and related to anesthesia relationships with surgery centers. e American Society of Anesthesia has attempted to cause the Department of Justice to attack such ASC/anesthesia relationships, and the OIG has responded negatively to an ASC anesthesia relationship in OIG Advisory Opinion 12-6. Many of these legal issues are very nuanced with a tremendous amount of interpretation and gray areas. 13. Hospital-employed physicians as investors. From a legal per- spective, there are strong arguments that hospital-employed physicians should be able to invest in joint venture ASCs where the hospital is a partner. Sixty-seven percent of ambulatory surgery centers report being moderately to severely impacted by the increase in hospital-physician employment. Here, there would have to be certain caveats and requirements to allow such invest- ment. For example, the physicians would be treated like any other physician in that the physician could not be helped in their investment by the hospital and the hospital cannot force the physician to invest. is concept of whether hospital-employed physicians can invest has become a bigger issue as more physicians are employed and as hospital become more active with ASCS. 14. Direct marketing by ASCs. In certain specialties and centers, di- rect consumer marketing is very strong. e specialties where it seems to be the strongest include pain management, plastic surgery and spine. Direct marketing and marketing arrangements by ASCs also seems to be a growing trend in the arena of orthopedics and GI. n

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