Becker's ASC Review

8 F ort Lauderdale, Fla.-based Broward Health, formerly North Broward Hospital District, agreed to pay $69.5 million last month to settle allegations brought by Michael Reilly, MD, and the Department of Justice in a federal lawsuit. Dr. Reilly claimed the system violated the False Claims Act by engaging in improper financial re- lationships with physicians. Although Dr. Reilly's action was against Broward Health, he claims health systems across the country have the same problems. Dr. Reilly told Kaiser Health News the issue begins with the growing trend of hospitals employing physicians. "We have to get hospitals out of the business of hiring doctors," Dr. Reilly told Kaiser Health News. "It's potentially detrimental to the patient, and it's terrible for healthcare." Dr. Reilly was offered an employment deal with Broward Health, but he rejected the offer aer his lawyer told him it was illegal. In his lawsuit, which was originally filed in 2010 and unsealed last month, Dr. Reilly claims the system carefully tracked the value of physician referrals and pres- sured physicians to increase referral volume when they lagged. In addition to fostering an environment to mo- tivate physician referrals, the employment trend "blunts physician innovation, discovery and inge- nuity," Dr. Reilly said. e Broward Health settlement is just one of more than a dozen Stark Law cases the DOJ has settled in the last two years. Just a week aer Broward Health settled with the DOJ, Altamonte Springs, Fla.-based Adventist Health System agreed to pay $118.7 million to the federal government and to the states of Florida, North Carolina, Tennes- see and Texas to settle allegations it violated the False Claims Act and Stark Law by maintaining improper compensation arrangements with refer- ring physicians. n Whistle-Blower Physician: 'We Have Got to Get Hospitals Out of the Business of Hiring Doctors' By Ayla Ellison has reduced the opportunities for de novo proj- ects but increased opportunities to sell to our partner with hospitals." e Affordable Care Act promotes high quality care for the lowest cost possible, leaning on data collection, reporting and transparency to drive better value. ASCs typically have higher quality and patient satisfaction scores than hospitals as well as lower costs. "A lot of the changes in healthcare will be beneficial for ASCs because they favor high quality and low cost," says Matt Searles, MBA, partner with Merritt Healthcare. "However, we are in a mature industry and that reality is leading us to see fewer opportunities for new facilities. Instead, there is more consolidation and working with hospitals that want to take procedures to the outpatient setting. A lot of the things that drove success 15 years ago won't drive it now, but that's how the industry evolves and changes. We'll make it a positive for our business." And hospitals are ready to acquire. A new Ac- centure report shows hospitals and health sys- tems are abandoning hospital acquisitions for physician practices and clinics. ese vertical acquisitions are expected to reach 84 percent of the total provider acquisition volume by 2018, up 74 percent from today. Payers are also driving outpatient cases to sur- gery centers and patients are more cost-con- scious than in the past. As a result, ASCs are an attractive option for hospitals. Payer trends are driving ASCs to partner with larger entities — including corporate partners and health sys- tems — as well. "e continued deterioration of being out-of- network has made the strategy more challeng- ing but is creating opportunities to buy into troubled centers," says Mr. Lambert. "Health plan deductibles and copays continue to in- crease driving an increase in the consumer/pa- tient's concern for cost-effective care." Physician-owned facilities are also more likely to partner with larger entities as expenses and regulations increase without a similar uptick in compensation and reimbursement. "As part of the whole healthcare reform efforts, we expect reimbursement to continue tighten- ing and there will be less out-of-network oppor- tunity. Additionally, because of industry satura- tion, we won't see ASCs grow at the same rate," says Mr. Searles. "You will look for growth from hospital partners or consolidation of economies of scale." While the large, national changes have slowed, there are still opportunities to make meaning- ful headway in pro-ASC legislation at the state- level allowing new cases into the center. ose changes include 23-hour stays in states where they're currently not possible. "We are expecting the federal legislation to be positive for the industry, and the 23-hour legislation at the state level would have an im- pact on orthopedic surgery centers," says Mr. Searles. "These are technically more difficult procedures to accommodate and require a different approach, but we can do those sur- geries safely and efficiently in the outpatient setting." n How Healthcare is Changing: Key Thoughts on Making it Positive for ASCs (continued from cover) "A lot of the things that drove success 15 years ago won't drive it now, but that's how the industry evolves and changes. We'll make it a positive for our business." — Matt Searles, partner with Merritt Healthcare Luke Lambert

• Cover