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6 Major Legal Issues for ASCs

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At the 20th Annual Ambulatory Surgery Centers Conference in Chicago on Oct. 25, Scott Becker, JD, CPA, partner at McGuireWoods and publisher of Becker's ASC Review, and Gretchen Townshend, partner at McGuireWoods, shared the following six key legal issues for ASCs in 2014.

1. Redemptions. "Redemptions are still a fascinating issue, and there's constant litigation on it," Mr. Becker said. ASC leaders need to consider the operating agreement when attempting to buy-out a physician, as the agreement will generally only allow redemptions for certain reasons. Leaders need to be sure they are not redeeming a physician without cause.

2. Non-competes. There are three main types of non-compete clauses with different legal considerations for each:
•    Investing in another ASC. "You almost need to have this non-compete in this business," Mr. Becker said, noting it is usually the most easy non-compete to defend in most states.
•    Becoming employed by a hospital. This is usually harder to enforce, but is not necessarily unenforceable.
•    In office limitations, which limit physicians from doing in-office surgery. "Most centers want to have this," Mr. Becker said. "It's the most-immediate threat for some specialties."

3. Anesthesia issues. In the past, the core model for anesthesia in ASCs was an independent fee-for-service contract. More and more, surgery centers have been getting into the business, which could result in legal issues, Mr. Becker said. "The more you employ anesthesia, the easier it is to defend," he noted.

4. Medical staff privileges. ASCs need to develop a plan for how to deal with disruptive physicians who may throw instruments, yell at the nursing or office staff members or are not kind to patients. "It is important for ASCs to ensure their bylaws are current and up-to-date. Develop a process so there is a framework in place already to deal with them," Ms. Townshend said.

5. Share pricing. "Historically, there has been relatively little focus on assessing buy-ins to make sure fair market value is being charged," Ms. Townshend said. "But there is monetary incentive to seek out and file those cases," she added, so ASCs need to be careful and ensure all share pricing is at fair market value.

6. Credentialing. There are two potential risk areas for ASCs when it comes to physician credentialing, according to Ms. Townshend:
•    Malicious credentialing. This occurs when failure to credential a physician was done in a malicious manner to keep someone out who should be qualified. To avoid this, ASCs should do background checks to fully assess the quality of the physician.
•    Negligent credentialing. This happens when a physician who is under-qualified is still offered a credential. Ms. Townshend recommended thoroughly checking references, education and background of physicians in order to prevent negligent credentialing.

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