Ambulatory Surgery Centers (ASCs) have revolutionized outpatient care for millions of Americans by offering a more convenient alternative to hospital-based procedures, all while maintaining a strong record of quality care and positive patient outcomes. Today, more than half of operations take place in outpatient settings. ASCs have become an integral part of the healthcare landscape, and they are here to stay.
Not only are ASCs great for patients, but they can be quite lucrative to own and operate. The ASC industry has seen rapid growth, significant consolidation, and substantial capital investment over the past decade. Despite these developments, the sector remains highly fragmented and competitive.
There are numerous complexities involved in owning and operating ASCs that not only can cause headaches but also require careful navigation of regulatory requirements and compliance with healthcare laws, which can be overwhelming for medical practice owners and operators. For those considering investments in this sector, consulting with a Georgia ambulatory surgery center attorney with expertise in ambulatory surgery centers is essential to avoid regulatory pitfalls, ensure compliance, and provide superior patient care.
What Is An ASC?
ASCs are healthcare facilities that specialize in providing same-day surgical care, including diagnostic and preventive procedures. ASCs are designed to perform surgeries and procedures that do not require overnight hospitalization, offering patients a cost-effective alternative to traditional hospital settings. By allowing patients to go home the same day as their procedure, ASCs enable recovery in the comfort of their own homes, contributing to greater patient satisfaction and lower healthcare costs.
What Types Of Procedures Are Offered At ASCs?
A key feature of ASCs lies in the types of procedures they perform. ASCs focus primarily on minor, low-risk outpatient procedures. These centers typically handle routine and elective surgeries that do not require extended recovery or overnight stays, with procedures being generally less complex. ASCs focus on patients who are healthy or have manageable health conditions, offering a streamlined environment for quick recovery. Many patients are able to return home the same day, making ASCs an attractive option for those seeking a faster recovery time.
Some of the procedures offered as ASCs include:
Ear, Nose, and Throat (ENT) Procedures:
- Ear tube placement
- Septoplasty
- Sinus surgery
- Tonsillectomy and adenoidectomy
Gastrointestinal (GI) Procedures:
- Colonoscopy
- Endoscopy (upper and lower GI)
- Hemorrhoid treatments
- Polyp removal
Gynecologic Procedures:
- Dilation and curettage (D&C)
- Endometrial ablation
- Hysteroscopy
- Tubal ligation
Ophthalmologic Procedures:
- Cataract surgery
- Glaucoma treatments
- LASIK and other vision correction surgeries
- Vitrectomy
Orthopedic Surgery:
- ACL reconstruction
- Carpal tunnel release
- Joint arthroscopy (knee, shoulder, wrist)
- Rotator cuff repair
Pain Management Treatments:
- Epidural steroid injections
- Nerve blocks
- Radiofrequency ablation
- Spinal cord stimulation trials
Plastic and Reconstructive Surgery:
- Breast augmentation or reduction
- Facial plastic surgery (rhinoplasty, facelifts)
- Liposuction
- Skin grafting
Podiatric Surgery:
- Achilles tendon repair
- Bunionectomy
- Foot and ankle fracture repair
- Hammer toe correction
Urologic Procedures:
- Cystoscopy
- Kidney stone treatments
- Prostate biopsy
- Vasectomy
Owning and Operating An ASC Can Be Cost-Effective
ASCs benefit from reduced overhead, as they typically have lower operational costs compared to hospitals. This is because they do not require large staff, emergency services, or inpatient facilities. As a result, ASCs can offer services at more affordable prices, which often translates into lower out-of-pocket expenses for patients. Additionally, ASCs operate with streamlined operations, focusing on outpatient procedures that allow them to utilize a more efficient, specialized workforce and equipment tailored for specific types of surgeries. This efficiency helps reduce unnecessary expenses, leading to significant savings. Since procedures at ASCs are generally less complex and involve fewer resources, they often result in lower insurance premiums for both patients and insurance providers. Motivated to remain cost-effective and competitive in the healthcare market, ASCs provide an attractive, affordable alternative to hospital-based surgeries for patients looking to save money.
Complications Involved with ASCs
Just as with surgeries, owning and operating an ASC comes with the risks of complications. ASCs can run into trouble in two main ways: issues with patient care and issues with regulatory compliance.
Costly Mistakes with Patients
As ASCs have become more profitable, they have also found themselves as defendants in costly litigation. Nuclear verdicts (defined as verdicts of more than $10 million) have been on the rise across healthcare, and ASCs are no exceptions. This is why having a healthcare lawyer with specific expertise with ASCs is paramount. An ambulatory surgery center legal expert can help your ASC develop policies and procedures that protect against suits. Here are some of the top reasons that ASCs face lawsuits:
Failure to Adhere to Policies & Procedures
Ambulatory surgery centers must follow specific protocols for patient care, including medical history collection, room sanitization, and medication administration. Failure to adhere to these policies can result in malpractice claims.
Failure to Diagnose
This occurs when a healthcare provider fails to identify symptoms or consider potential complications. An example is if a physician misdiagnoses appendicitis despite clear symptoms.
Failure to Intervene
Healthcare providers must act swiftly if complications arise during procedures. If a hernia surgery at an ambulatory surgery center goes wrong and the medical team fails to intervene quickly, they may be held responsible.
Failure to Notice and Remove a Foreign Body
Foreign bodies (e.g., sponges or surgical instruments) left inside a patient after surgery are a common malpractice issue.
Failure to Perform
After a correct diagnosis, delays or failure to order necessary tests or treatments can be grounds for malpractice. Delayed care after a diagnosis can be considered a breach of the standard of care.
Failure to Provide Surgical Equipment
Ambulatory centers must ensure they have the necessary equipment for procedures. If equipment is lacking or the center fails to transfer the patient to a hospital when needed, they may be liable for malpractice.
Laws and Regulations Applicable to ASCs
In addition to providing superior patient care, ASCs must not run afoul of relevant rules and regulations. There are a variety of potential legal issues involved with owning and operating an ASC. ASCs face various challenges related to structure, billing, and reimbursement, and they often undergo intense scrutiny from government regulators. For those considering investments in this sector, staying compliant is crucial.
Government oversight of ASCs has intensified. ASCs are frequently subject to audits, which can result in referrals to government agencies for further investigation and potential enforcement actions. Both federal and state laws are applicable.
Most ASCs provide care to Medicare beneficiaries, which means they are required to consistently meet the standards set by Medicare. This includes adhering to specific regulations regarding patient care, billing practices, facility operations, and quality reporting. ASCs must demonstrate ongoing compliance with Medicare’s requirements to maintain their certification and reimbursement eligibility. Regular inspections, audits, and updates to practices are necessary to ensure that they meet the evolving guidelines established by the Centers for Medicare & Medicaid Services (CMS). Non-compliance can lead to penalties, reduced reimbursements, or loss of Medicare participation, which could significantly impact the ASC’s operations and financial stability.
Some of the laws and regulations that ASCs must abide by are:
Anti-Kickback Statute
The Anti-Kickback Statute is a federal law that prohibits offering, paying, soliciting, or receiving any remuneration to induce referrals for services covered by federally funded healthcare programs like Medicare and Medicaid. This includes cash payments, gifts, or other forms of compensation. The AKS aims to prevent unethical financial arrangements that could compromise medical judgment, ensuring that patient care decisions are based solely on clinical needs rather than financial incentives. Violations can result in severe penalties, including fines, imprisonment, and exclusion from federal healthcare programs. ASCs must implement strict compliance programs to avoid inadvertent violations and ensure that all business arrangements meet safe harbor provisions.
Stark Law
The Stark Law restricts physicians from referring Medicare or Medicaid patients to entities in which they have a financial interest. This law covers a range of services, such as lab testing and imaging. Its purpose is to prevent conflicts of interest and ensure that referrals are made purely for medical reasons rather than financial gain. Exceptions, known as “safe harbors,” allow certain arrangements if they meet specific criteria. Non-compliance can result in significant penalties, including fines and exclusion from federal programs. ASCs must regularly review their financial relationships and contracts to ensure compliance with Stark Law regulations.
HIPAA (Health Insurance Portability and Accountability Act)
HIPAA sets national standards for protecting patients’ health information. It requires ASCs to implement policies and safeguards to ensure the confidentiality, integrity, and availability of electronic Protected Health Information (ePHI). Compliance includes securing patient records, training staff on privacy practices, and limiting access to sensitive information. HIPAA also governs how patient data can be shared, ensuring that disclosures are made only with proper authorization. Violations can lead to hefty fines and reputational damage. ASCs must conduct regular risk assessments and maintain up-to-date privacy and security protocols to safeguard patient information.
Difficulties in Purchasing and Establishing An ASC
The above rules and regulations apply once an ASC is operational. Before an ASC can open its doors, owners and operators must navigate a complex landscape of regulatory, financial, and logistical hurdles.
Purchasing
Ownership is not simply signing on the dotted line. Purchasing an ASC requires thorough due diligence to verify the seller’s compliance with regulatory standards and Medicare claims submission requirements. Buyers must also understand the necessary steps for transferring Medicare billing privileges.
Certificate of Need (CON) Laws
Certificate of Need (CON) laws are state-level regulations that govern the approval of significant capital projects and expenditures for certain healthcare facilities. In states with CON programs, a health planning agency or similar authority must authorize the establishment of new healthcare facilities or the expansion of services in a specific area. Georgia does have CON laws.
Notably, the Georgia General Assembly enacted reforms to the state’s CON program through H.B. 1339, signed into law by Governor Kemp on April 19, 2024, and effective as of July 1, 2024. The updates included significant modifications to the CON application and appeals process, along with new exemptions. However, CON remains in Georgia.
Because the rules and regulations are complex, and have recently been modified, it is important to work with a lawyer well-versed in CON laws as well as ASCs if you want to own or operate an ASC.
How Healthcare Attorneys Can Assist ASC Owners and Operators
Healthcare attorneys play a crucial role in supporting ASC owners and operators by ensuring compliance and navigating complex legal frameworks. They provide expertise in key areas such as regulatory compliance, corporate structuring, and risk management. Attorneys help ASCs adhere to federal and state regulations. They assist in developing and implementing robust compliance programs to avoid costly penalties and legal challenges.
In addition, healthcare attorneys advise on corporate structuring and governance, ensuring that ASC partnerships and financial relationships comply with laws governing self-referrals and anti-kickback provisions. They also draft and review contracts with staff, vendors, and payers, safeguarding the ASC’s interests.
Risk management is another critical area where attorneys provide guidance. They help implement policies to mitigate liability related to patient care, data privacy, and employment law. In the event of disputes or audits, healthcare attorneys represent ASCs in negotiations or litigation, protecting their financial and operational stability.
Contact An Experienced Healthcare Attorney
Given the highly regulated nature of ASCs, partnering with healthcare lawyers with experience with ASCs is crucial. Healthcare lawyers who understand the offer valuable guidance on navigating the complex legal landscape, ensuring that all aspects of ASC ownership, management, and operations meet regulatory requirements. A Georgia ambulatory surgery center lawyer can assist in structuring compliant financial arrangements, obtaining necessary licenses, drafting contracts, and developing robust compliance programs. They can also help ASC owners and operators, current or prospective, to interpret evolving laws and regulations, reducing the risk of violations and penalties. By proactively addressing these legal considerations, ASC owners can focus on delivering high-quality patient care while safeguarding their facility’s financial and operational stability.