4 Questions to Ask When Considering Integration With an Existing ASC

Plagued by decreasing payments and payor changes, many hospitals and ASCs are integrating in order to increase referrals, eliminate competition and share the benefits of payor and purchasing clout. Wayne Miller, JD, of Compliance Law Group in Thousand Oaks, Calif., offers four questions to ask when considering integrating an existing ASC with your hospital.

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1. Does the ASC have a good reputation in terms of quality and staffing? One of the most important factors when considering an ASC affiliation is the ASC’s history and reputation, Mr. Miller says. “There are plenty of examples of ASCs that are quite questionable in terms of quality and staffing, and while some of that can be improved upon and changed, it’s often known in the community when an ASC has problems,” he says. “In this day and age, it may not be worth taking something over that has to be fixed.” Talk to community members and local physicians about the reputation of the ASC to determine whether you want to explore a partnership. Mr. Miller says unless you have a team or a third-party ASC management company ready to clean up a failing ASC, you should probably eliminate surgery centers that aren’t already successful.

2. Is the ASC prepared for a number of different types of surgeries? An ASC that is set up to perform different procedures is more ready for a hospital partnership than a single-specialty facility, Mr. Miller says. “If a center is focused on a particular type of procedure, like bariatric surgery, that really requires certain types of equipment and a certain investment that’s already in place, it may not be useful for other types of surgery,” he says. Look at the equipment, set-up and staff in the ASC to determine whether it could be used for general surgery or different types of surgery. If an ASC is specifically tailored to a single specialty, could it be altered to fit your hospital’s needs?

3. Are the center’s existing physicians and staff on board with the partnership? You don’t want to integrate with an ASC only to find that the center’s existing surgeons are unhappy with the relationship. “You want to look at the physicians who utilize the facility already and determine whether they’re prepared to work with the hospital,” Mr. Miller says. “If they have a mindset of total independence, it might be too hard of a fight to try to affiliate.” This also applies to ASC staff members. You should discuss during your negotiations how the ASC staff members will be paid following the integration. “You need to find out how well they’re going to integrate with hospital pay and hospital benefits,” Mr. Miller says. “It may be possible to keep them separate from the hospital in terms of pay, but you need to know beforehand.”

4. How easily can the center meet state licensure requirements as part of the hospital? Making a free-standing surgery center part of a hospital may require state licensure that the ASC does not already hold. “If you have a growing concern that it may take a lot of time and a lot of money to potentially convert a facility with accreditation into a facility that meets state licensure for a hospital, it might not be worth it,” Mr. Miller says.

Learn more about Compliance Law Group.

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