OIG Approves ASC Joint Venture between Hospital and Surgeons
The Office of Inspector General (OIG) of the Department of Health and Human Services issued an advisory opinion sanctioning a joint venture arrangement between a group of orthopedic surgeons and a hospital to form an ambulatory surgery center (ASC). The requestors of the opinion sought the OIGs input on whether the proposed arrangement would violate the anti-kickback statute, which prohibits giving or receiving any remuneration in exchange for the referral of patients to receive items or services reimbursable under any federal health care program.
The agency has developed a number of safe harbors for arrangements that could technically violate the prohibition but that contain enough safeguards that they are unlikely to result in fraud or abuse. The proposed arrangement does not meet the relevant safe harbor for ASC joint ventures between hospitals and physicians for three reasons: 1) the hospital would be in a position to make referrals to the ASC and the surgeon investors; 2) the physicians would not hold their interests in the ASC directly but through a limited liability company; and 3) the hospital and the surgeons could potentially receive different returns on their investments. The OIG analyzed the arrangement and the safeguards the parties had built into their agreement. It determined that the risk of abuse would be low, and it would therefore not impose sanctions on the parties involved.
As with all advisory opinions, the analysis in this case is limited to the requestors of the opinion and cannot be relied upon by other parties.
Anesthesia Practices Weigh Options for a Pain Center
Opening a pain management facility can generate additional income for your anesthesiology practice, but it can demand a lot of time and overhead. When deciding whether to venture into pain management, look beyond potential revenue. Instead, view it in the context of risk, time required to get it up and running, and the myriad regulations governing what you can do. Listed below is a process for evaluating the many issues related to opening a pain management facility.
A Process for Success:
- Determine whether you want an office-based or ambulatory surgery center (ASC)-based facility. Each has benefits and drawbacks.
- Check your state regulations. Many states have jurisdiction over what procedures office-based facilities can perform. The facilities may need to meet state licensing, registration and/or accreditation requirements to perform certain kinds of procedures or those demanding certain levels of anesthesia.
- Consult with commercial payers in your area to arrive at their requirements for a physician(s) to receive certification to function as pain specialists in the office-based settings.
- Determine the provisions for state licensure and the Medicare conditions of participation for ASC certification.
- Assess the catchment area for competition.
- Understand the Certificate-of-need requirements (and possible exemptions in certain situations), as well as other state requirements.
- Evaluate the return on investment of your pain center in multiple locations (office based, ASC and hospital).
- Create a detailed business plan that outlines the projected revenues by procedure type, volumes anticipated and payer mix.
- Create a marketing plan with referral sources and projected referral patterns by specialty.
- Create your staffing model based on anticipated procedure volumes and staff mix.
- Create an operating cost budget to compare against the revenue assumptions to determine the break-even period.
- Determine the pain management and regional anesthesia capabilities of each physician partner and determine the training needs to implement your pain service.
- Draft a communication plan to cast a common vision for the anesthesia partners so that everyone is on the same page and understands the benefits for expanding into the pain management arena.
- Implement your plan and monitor the progress.
- Celebrate your successes.
Just as with any new business venture, the better the research, business plan and implementation, the better chance of success. To successfully launch your new pain management facility, keep it simple and realistic. The payoff can be big, but only if you do it correctly.
