Becker's ASC Review

88 1. Each year, physicians perform more than 23 million procedures in ASCs. 1 2. ere are presently 5,464 Medicare-certified ASCs. ere are 5,686 regis- tered hospitals operating in the United States including nonprofit, for-profit, federal government, state and local government, psychiatric and long-term hospitals, as well as hospital units in institutions. 2 3. Approximately 25 percent to 30 percent of ASCs are owned or managed by multi-facility chains. 3 4. Of the 766 ASCs owned by the largest chains, about half are headquartered by Nashville firms including AmSurg and Hospital Corporations of America. 3 5. Cigna Health and Life Insurance Co. filed a billing fraud lawsuit in fed- eral court in an effort to recoup millions paid to 11 Indiana-based surgical centers. e centers allegedly engaged in a "fee forgiveness" model to bring in Cigna's out-of-network patients through reducing members' copays and other fees while charging Cigna inflated prices. Cigna paid the surgical cen- ters more than $6.5 million in claims before becoming aware of the centers' "fee-forgiving" model. 5 6. e 10 most common services ASCs provide are 2 : 1. Cataract surgery w/ IOL insert: 17 percent 2. Upper GI endoscopy: 7.8 percent 3. Colonoscopy and biopsy: 6 percent 4. Diagnostic colonoscopy: 2.6 percent 5. Aer cataract laser surgery: 4 percent 6. Lesion removal colonoscopy: 4.6 percent 7. Injection spine: lumbar, sacral: 3.2 percent 8. Infection foramen epidural lumbar, sacral: 3.9 percent 9. Injection paravertebral: lumbar, sacral, add on: 3.4 percent 10. Injection paravertebral: lumbar, sacral: 2.4 percent 7. e Ambulatory Surgery Center Association serves as the national mem- bership as well as the advocacy group for ASCs. William Prentice is the exec- utive director of ASCA. He previously served as the director of the Washing- ton office for the American Dental Association. Mr. Prentice holds a master's degree in administration from the University of Pennsylvania as well as a law degree from Rutgers Schools of Law — Newark in New Jersey. Terry Bohlke, CASC, is the president of the organization. Mr. Bohlke is vice president of operations for National Surgical Healthcare. Harmony Surgical Center CEO Rebecca Craig, CASC, is ASCA's vice president, and David Sha- piro, MD, is the immediate past president. 1 8. e first ASC was opened in 1970 in Phoenix by Wallace Reed, MD, and John Ford, MD, in an effort to provide convenient, cost-effective surgical ser- vices to local residents. Five surgeons performed cases at the center on the first day it opened, and four of those procedures required general anesthesia. 1 9. Of all the ASCs operating in the United States, approximately 20 percent to 25 percent have some ownership by a hospital partner. 10. e largest ASC chains in terms of numbers of centers include AmSurg, Tenet/United Surgical Partners International, Surgical Care Affiliates, Hospi- tal Corporations of America, Ambulatory Surgical Centers of America, Sur- gery Partners and Physicians Endoscopy. 4 11. Tenet Healthcare formed a joint venture ambulatory business with United Surgical Partners International in March 2015, thus forming the largest ASC company by number of ASCs in the current market. e company presently owns interest in 244 ASCs, 20 imaging centers and 16 surgical hospitals in 29 states. 12. AmSurg, a leading ambulatory surgery center management company, owns 248 outpatient centers across the country , 51 of which are multispe- cialty, making AmSurg comparable in numbers to Tenet-USPI. 13. AmSurg acquired Sheridan Healthcare for $2.35 billion in May 2014. Am- Surg shares increased aer the acquisition announcement, with Raymond James analyst John Ransom setting AmSurg's price target to $60 and upgrad- ing the stock at a "buy" rating. 7 14. Surgery Partners acquired Symbion for $792 million in June 2014, in- creasing the company's holdings to around 100 centers across 27 states in 2014. 8 15. Surgical Care Affiliates presently operates 185 surgical facilities in 34 states. e company has more than 5,000 employees and more than 7,500 physicians performing procedures in SCA facilities annually. 9 16. Some of the leading companies that oen manage or develop ASCs that typically own a minority interest in the ASC include ASCOA, Physicians En- doscopy, Regent Surgical Health, ASD Management, Merritt Healthcare, Nu- eterra Healthcare, Blue Chip Surgery Center Partners, Constitution Surgery Centers and Practice Partners in Healthcare, among many others. Physicians Endoscopy owns and operates more than 35 endoscopic ASCs across the United States. Regent Surgical Health develops, manages and owns 21 ASCs, with 16 of those ASCs being joint ventures with leading hospitals. ASD Management presently has 25 surgery centers that are developed and managed in partnerships with physicians or as joint ventures with hospitals. Merritt Healthcare presently has nine surgery centers with four more centers currently in the development stage. Nueterra Health has 77 facilities in op- eration throughout 27 states. Blue Chip Surgery Center Partners has 17 surgery centers, and Constitution Surgery Centers is operating 15 facilities. Practice Partners in Healthcare presently operates seven surgery centers and has six additional centers in the development and construction phase. 17. ASCOA is one of the only ambulatory surgery centers companies owned and managed by physicians. e company currently has developed, acquired and turned-over more than 70 surgery centers since it was founded in 1997. 10 18. Other notable ASC management companies include Pinnacle III, Merid- ian Surgical Partners, Nobilis Health, SurgCenter Development and Surgical Management Professionals, among others. Pinnacle III has developed more than 30 surgery centers across the United States. Nobilis Health develops and manages more than 100 surgical centers. SurgCenter Development has developed more than 130 surgery centers over the last 20 years. Surgical Management Professionals currently has 20 surgi- cal facilities across the United States and Canada. 19. Meridian Surgical Partners presently partnered with 10 physician-owned ASCs across the United States. e company specializes in acquisition, devel- opment and management of spine and orthopedic-driven ambulatory sur- gery centers. John C. Wilson Jr. has been CEO since October 1, 2013 while additionally serving as the chief financial officer since the company's estab- lishment in 2006. Kenneth Hancock serves as the president and chief devel- opment officer of Meridian Surgical Partners. 20. Last year, approximately 38 percent of ASC management companies report- ed having between one to five acquisitions, with 24 percent of the companies acquiring between six and 10 centers. A reported 29 percent did not acquire any ASCs, according to HealthCare Appraisers "2015 Valuation Survey." 11 50 Things to Know About the ASC Industry By Mary Rechtoris

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