The dynamic landscape of healthcare is witnessing a strategic influx of investments into ambulatory surgery centers (ASCs) by health systems. Although ASCs tend to operate with lower reimbursement rates compared to traditional inpatient settings, their emergence presents a dual promise: providing cost-effective alternatives and alleviating the strain on inpatient facilities.
Regulatory Uncertainties and Strategic Caution
In this evolving scenario, one critical aspect is the uncertainty surrounding the regulatory framework under the Biden administration. Brad Bonde, a respected shareholder at LBMC, underscores the caution in prematurely assuming the fate of last year’s regulations. The potential for regulatory revisions casts a shadow, prompting stakeholders to await clarity before adapting their strategies. “There is probably a little hesitancy to make an assumption on what came out last year until there is more clarity or any indication on if regulators have the desire to go in and change it,” he said.
Safe Harbors and Compliance
Central to the ASC landscape are the safe harbors established within the anti-kickback statute. While strict adherence to all criteria is not mandatory, healthcare providers deviating from most conditions may inadvertently attract regulatory scrutiny. Notably, these safe harbors emphasize the necessity of a physician’s investment dissociation from referrals, ensuring that returns align proportionally with the capital invested. Crucially, hospitals are mandated to uphold a fair market value standard in their dealings related to real estate, equipment, and compensation.
The “One-Third” Rule and Physician Integration
The historically challenging “one-third” rule emerges as a focal point. This rule stipulates that a substantial portion of a physician’s practice income—specifically, at least a third—must originate from ASC procedures. Additionally, the physician should conduct a corresponding proportion of procedures at the ASC where they hold investments. Yet, the practicality of meeting this rule varies, particularly for specialists who often witness higher reimbursement rates within the inpatient realm. Federal authorities are looking for physicians who not only invest but also drive referrals and actively perform surgeries, seamlessly integrating the ASC into their practice.
Shifts in Ownership Trends and Risk Aversion
Interestingly, while a significant number of hospitals opt for ASCs as joint ventures with physicians, a mere third of these hospitals extend investment opportunities to employed physicians—a notable decrease over three years, according to the Avanza report. This trend potentially reflects hospitals’ risk aversion tendencies, wherein the intricate nature of the legal landscape prompts some institutions to shun physician ownership to mitigate compliance-related risks.
“Rather than risk being out of compliance with the complicated law, which could in turn increase their risk profile, some hospitals are choosing not to permit physician ownership,” said Katie Tarr, a shareholder at LBMC.
Navigating the Evolving ASC Landscape
In conclusion, the ASC landscape stands as a testament to the healthcare sector’s ongoing evolution. The delicate balance between seizing opportunities and navigating regulatory intricacies defines this realm. As health systems venture into the ASC domain, a thoughtful consideration of regulatory shifts, safe harbor principles, and investment dynamics will be pivotal in charting a successful course forward.
For those seeking further insights or having questions about the ever-evolving landscape of Ambulatory Surgery Centers, we encourage you to reach out to our experts. If you have inquiries or wish to explore this complex terrain with a seasoned perspective, don’t hesitate to contact Brad Bonde or Katie Tarr. Their deep understanding and experience can provide valuable guidance as you navigate the intricate realm of ASCs. Feel free to connect with Brad at email@example.com or Katie at firstname.lastname@example.org.