The HHS Office of Inspector General issued a favorable opinion approving a joint-venture ASC arrangement between physicians, a management company and health systems last month.
The management company will own 8 percent of the center and provide consulting services while the health system and group of eight orthopedic and neurosurgeon investors would each own 46 percent. In a blog post, Bartt Warner, director of compensation arrangements at VMG Health, wrote that much of the OIG's April 29 decision relies on the health system's certifications and outlined several safeguards to mitigate risk.
Becker's covered the initial news May 3, and here are 10 more details:
1. New physician owners can invest directly, but not through a pass-through entity.
2. The facility's real estate will be owned by the health system, physicians and management company.
3. The health system and real estate company can enter into space and equipment leases and services arrangements with the ASC.
4. Physicians are required to meet the one-third rule to meet ASC safe harbor provisions, and the management company will oversee compliance. The orthopedic surgeons will derive one-third of their income in the previous fiscal year from ASC-qualified procedures, while the neurosurgeons will not.
5. The physicians will rarely refer patients to each other. The estimated case volume referred between owners should be less than 1 percent under the arrangement.
6. Investors will provide patients with a written notification of their ownership in the ASC when making referrals.
7. The health system and management company can't encourage referrals to the center.
8. The health system's affiliated physicians will receive fair market value compensation, which won't be related to the volume or value of referrals to the center or physician investors.
9. The ASC's owners will receive distributions and capital contributions proportional to their ownership interest.
10. New ASC investors will not be given ownership based on past or future case volume or value of referrals to the center.