Anesthesia and the ASC: A Perfect Partnership?
SUMMARY: More and more cases are moving from the hospital to the surgery center. How involved should anesthesia groups be in the running or even owning of these facilities? Today's alert looks at the pros and cons.
In 1994, country singer Neal McCoy had a number-one hit on his hands. It was a song about finding the perfect match in a lifetime mate. The lyrical theme of the song is summed up in the concluding lines of the chorus: "We were meant to be together, no doubt about it." Sometimes, you just know when a relationship is right. There is a silent recognition and a mutual understanding of a deep connection. It's like it was meant to be.
In the realm of healthcare, opportunities for a long-term partnership will occasionally arise. We have seen over the last several years a movement toward merger and collaboration, where one entity will join itself to another. Oftentimes, it can be the perfect marriage from a business and clinical care perspective. One of the partnership opportunities being considered in recent years involves anesthesia groups and ambulatory surgical centers (ASCs). To what extent can an anesthesia practice invest in these facilities, and is this something that groups should explore? Today's article examines those questions.
Ownership Opportunity
With their burgeoning market share within the healthcare sector, ASCs are increasingly seen as a profitable business opportunity. Many anesthesia groups include ASCs within their business strategy. For some, this involves not only moving an increasing percentage of cases into the ASC setting but securing an ownership interest in such a facility. However, questions often arise concerning the extent to which a physician who has an ownership interest in an ASC can reasonably refer patients to his or her anesthesia line of service within that same location. Because of the potential triggering of the Anti-Kickback Statute (AKS)—especially in terms of referring patients to their own providers—some anesthesia providers or groups may be reticent to pursue an ownership interest. However, a recent decision by a federal agency may allay some of these concerns.
JD Supra is reporting that a pain management practice that employs a certified registered nurse anesthetist (CRNA) to provide anesthesia services in both an office location and an ambulatory surgery center (ASC) that is partially owned (80 percent interest) by the physician-owner of the practice has been given the green light by the Office of Inspector General (OIG) to retain profits earned pursuant to a reassignment of billing rights.
In Advisory Opinion 21-15, the OIG reviewed two aspects of the arrangement that called the AKS into question. Here is a more detailed breakdown of the OIG's reasoning and finding:
The practice pays the CRNA remuneration in the form of salary paid in exchange for the CRNA performing anesthesia services. Because the CRNA orders and arranges for items that are reimbursable, at least in part, by federal healthcare programs, the AKS is implicated. The OIG notes that this first stream is protected because the practice certified that the CRNA is a bona fide employee and, thus, the wages are protected by the employment safe harbor (42 C.F.R. §1001.952(i)).
By reassigning the right to bill to the physician-owner's practice, the CRNA is giving the practice the opportunity to earn a profit from the anesthesia services. Because the physician-owner of the practice refers patients to the CRNA for anesthesia services and otherwise arranges for the purchase of anesthesia services performed by the CRNA that are reimbursable, at least in part, by federal healthcare programs, the AKS is implicated. While the OIG noted that the employment safe harbor is not applicable on this point (because it only protects remuneration that flows from the employer to the employee), it nevertheless concluded that this second stream of remuneration is "sufficiently low risk" because it involves a "straightforward" employment arrangement involving the reassignment of billing rights from the CRNA to an employer. The OIG adds that such arrangements are a "commonplace practice in the healthcare industry."
So, from a compliance standpoint, there are permissible parameters within which a group that provides anesthesia services can both have a significant ownership interest in an ASC while still being able to bill for such services at that facility. Having established that this type of arrangement is permissible, let's now turn to a discussion of whether investment in an ASC is advisable. Is it a perfect partnership?
Practical Implications
For one anesthesia CEO, the biggest opportunity for growth for the specialty is "a joint venture between ASC owners and anesthesia providers." Another anesthesia group CEO echoed this conclusion by stating: "our best growth opportunities are at the ASC level, as well as office-based anesthesia." With the continual growth of ASCs as part of the healthcare delivery market, it would appear that anesthesia's fortunes may be increasingly tied to the rising star of surgery centers. But does that mean that anesthesia groups should seek an ownership interest in these facilities?
A few years ago, the pros and cons for an anesthesia group considering an ownership investment in a surgery center were outlined in an article by Becker's ASC Review. We list them here for your consideration.
Among the positive reasons for securing an ownership interest in the ASCs are the following:
- More dedication to the job. Anesthesiologists are going to work harder and be more flexible if they have skin in the game. There is no question invested anesthesiologists will involve themselves in running the ASC.
- More thoughtful use of resources. Physician-owners are going to be more careful about ordering expensive disposable supplies and equipment, such as an ultrasound for peripheral nerve blocks.
- More participation. Anesthesiologists who are owners are more likely to be active participants in the affairs of the ASCs. They also tend to be more agreeable when it comes to covering underutilized rooms.
Strangely, what the list does not include is the most obvious reason for having ownership in an ASC: monetary profit. More and more cases are transitioning from expensive hospitals to pared-down surgery centers, and often these cases involve a more amenable payer mix. Facility owners receive a facility fee, as well as the professional fee since they are also providing physician services. The negatives to owning an ASC were listed as follows:
- Hard to change anesthesiologists. If the relationship between surgeons and anesthesiologists goes sour, it will be more difficult to cut ties with anesthesiologists who still hold shares in the center.
- Fewer shares for surgeons. The anesthesiologist who owns part of the center potentially uses up a share that could have been sold to a surgeon who can bring in more cases.
The article goes on to assert that there are other ways to positively tie an anesthesiologist to the center besides outright ownership. For example, naming the anesthesiologist as medical director would allow that individual to play an integral role in decision-making. To encourage greater productivity, pay bonuses might be offered by the facility. Regardless of how the relationship between the anesthesia group and the surgery center is configured, it is going to be a relationship of significance for years to come.
If you have questions about this topic, please contact your account executive, or you can reach out to us at info@anesthesiallc.com. On a final note, before entering into any kind of ownership arrangement in a surgery center, we would recommend that you seek the advice of your local healthcare attorney regarding the specifics of the arrangement.
With best wishes,
Tony Mira
President and CEO