From: Scott Becker <>
Subject: [Becker's ASC E-Weekly] New Advisory Opinion on Orthopedic-Driven Physician-Hospital Joint Venture; Missouri Health Care System to Pay $60 Million to Settle False Claims Act Allegations; Susan Kizirian of ASCOA Writes About the Cost of Orthopedic Surgery; Ophthalmology Remains a Profitable Specialty; Case Costing and Advanced Benchmarking Audio Conference Featuring Ann Geier and Susan Kizirian (Aug. 6)
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July 24, 2008
New Advisory Opinion on Orthopedic-Driven Physician/Hospital Joint-Venture

Scott Becker reports that McGuire Woods (Scott Becker, JD, CPA, and Melissa Szabad, JD), with help from Winston & Strawn (Tom Mills and Marion Goldberg) and Much Shelist (Neal Goldstein), were privileged, on behalf of an ASC joint venture, to have received this week a favorable OIG advisory opinion on a physician/hospital ASC joint-venture. The ASC included some non-safe harbor compliant orthopedic physicians. To obtain the favorable opinion, and provide comfort to the OIG, the opinion had to include several prophylactic steps. The OIG will publicly publish the opinion Friday, and we will run a special analysis on the opinion Tuesday.

This most recent and lengthy experience with the OIG indicates its continued high level of concern with indirect referrals as well as its growing expertise in niche areas.

Latest News & Analysis

1. Missouri Healthcare System to Pay $60 Million to Settle False Claims Act Allegations. Click Here button   

2. Susan Kizirian: Cost of Doing Orthopedic Surgery. Click Here button 

3. Less Than Two Weeks Until Case Costing and Advanced Benchmarking for ASCs Audio Conference (Aug. 6). Hear From Ann Geier, Vice President of Operations for ASCOA, and Susan Kizirian, COO of ASCOA. Complimentary Registration Available for ASC Review Subscribers. Limit 50 Registrants. Click Here button 

4. Minnesota's Fairview Health Services May Go Out-of-Network With Blue Cross After Price Standoff. Click Here button

5. Cincinnati's Deaconess Hospital to Become Joint-Venture With Physicians. Click Here button

6. Missouri Physicians' Antitrust Case Against Health Insurers Heads to Arbitration. Click Here button

7. Medicare Encourages Physician Use of E-Prescribing With Bonuses. Click Here button

8. Receive a Free Copy of the VMG Health Intellimarker, an Outstanding Resource for ASCs. Please E-mail Mia Norman ( at VMG Health. Click Here button

9. 15th Annual Improving Profitability and Business, Legal and Strategic Issues for ASCs; Oct. 23 to 25 at the Sheraton Hotel and Towers in Chicago. Highlights Include 75 Great Topics Focused on Big Strategic Ideas and Practice Business and Legal Guidance; Earn Up to 13.5 CME Credits, 13.5 CASC Credits and 13.3 CEU Credits; And 100 Top Speakers. Click Here button

10. From the Archives: 10 Keys to Turning Around Financially Troubled ASCs. Click Here button

Surgical Notes --
Ophthalmology Remains a Viable Specialty for ASCs
Q: Is it still worthwhile to consider ophthalmology as a specialty for my ASC?

A: Ophthalmology procedures are still profitable. Do not make a blanket decision to not seek ophthalmology as a specialty. ASCs can still profit from ophthalmology procedures if the ASC has significant volumes and has effective internal cost control (i.e., it is run very efficiently).

"We believe that, depending upon the surgeons, we can make substantial profit margins," says Brent Lambert, MD, FACS, chairman of the board and a founder of Ambulatory Surgical Centers of America. "You have to have a surgeon that has a short operating time for a 'phaco'. What that means is certainly under 15 minutes per case. That's four an hour, and he can keep his total supplies under $220, which is easily done. Our overhead expenses, except for supplies, through our centers, average $18 per minute for every minute the patient is in the OR. Let's says it takes 15 minutes to do the (surgery). That would be $270 in overhead and then $220 in supplies. You're getting $960 reimbursement on average. Those are very good numbers.

"And there are many surgeons who can do these (procedures) in six to ten minutes, and then it can be very substantial profit margins," he says. "But if someone is going to say they do two (procedures) an hour, then we're probably not going to make hardly any money, regardless of how good of a surgeon he is, because he's up around $540 on his minutes. Many of the surgeons who take a long time, in our experience, are also expensive users of supplies. It's sort of a double whammy and you can get killed by it."

Note: You can learn 44 other "Things to Know" about ASCs in the Sept./Oct. issue of the ASC Review.

How Does Your Facility Handle Surgery Cancellations?

A reader asks: What do you do to decrease high surgical cancellation rates? How do you approach the physician? The patient?

E-mail your thoughts to this question to Rob Kurtz at Be sure to include your name, title and business name. Shortly, we will publish a selection of the responses we receive and choose one response as our "featured answer."

Schedule Surgery --
ASC Communications & Ambulatory Surgery Foundation Fall Conference and Becker's ASC Review

15th Annual Improving Profits and Business and Legal Issues for ASCs
Presented by ASC Communications and the Ambulatory Surgery Foundation
Sheraton Hotel and Towers, Chicago
Oct. 23 to 25

Five great sample topics:

1. Seven Deadly Sins in Purchasing for an ASC -- Larry Lane, Supply Chain Management

2. The Best Opportunities for ASCs Now -- Larry Taylor, President and CEO, Practice Partners in Healthcare

3. Core Tips and Strategies to Succeed with Orthopedics and Neurosurgery in ASCs --
Mike Lipomi, President, RMC Medstone

4. Do you Play Hockey? -- Why Centers are Using Canadian Markets to Sell Their ASCs -- Donald Kramer, MD, President, Northstar Healthcare; Larry Teuber, MD, President,
Medical Facilities Corp.

5. How a Hospital Partner Can Help an ASC - Should Your Hospital Own Shares and How
Much Should It Own? -- Phil Taylor, MD, Knightsbridge Surgical Center; Robert Carrera,
CEO, Pinnacle III; Ed Hetrick, President, Facility Development and Management

To see the entire agenda, download the conference brochure (PDF).

There are four ways to register:

1. Fill out and mail or fax the registration form in the conference brochure.
2. Call (703) 836-5904 or (800) 417-2035
3. Register online by clicking here.
4. E-mail

*           *           *
Contact us toll-free: (800) 417-2035

Thank You to 12 Great Companies

1. Affiliated Credit Services, a collection agency and accounts receivable management company, for becoming a founding sponsor of The Hospital Review. Learn more about Affiliated Credit Services.

2. Healthcare Appraisers, a nationally recognized valuation and consulting firm providing services exclusively to the healthcare industry, for becoming a founding sponsor of The Hospital Review. Learn more about HealthCare Appraisers.

3. Somnia, a comprehensive anesthesia services company that offers a full range of anesthesia service solutions, for becoming a founding sponsor of The Hospital Review. Learn more about Somnia.

4. VMG Health, one of the most trusted valuation and transaction advisors in the United States, for becoming a founding sponsor of The Hospital Review. Learn more about VMG.

5. Blue Chip Surgical Partners, which is only three years old but already has ten physician-led centers in operation or in the construction phase, for becoming a founding sponsor of the Becker's Orthopedic & Spine Review. Learn more about Blue Chip Surgical Partners.

6. National Surgical Care, a nationwide owner and operator of ambulatory surgical centers, for becoming a founding sponsor of the Becker's Orthopedic & Spine Review. Learn more about National Surgical Care.

7. ASCs, Inc., which helps physician-owners of ASCs form strategic relationships with leading ASC management companies and hospitals, for renewing advertising in the ASC Review. Learn more about ASCs, Inc.

8. B. Braun, which delivers innovative healthcare products, medical devices and programs designed to improve both patient and health-professional safety, for renewing advertising in the ASC Review. Learn more about B. Braun.

9. CTQ Solutions, a leading satisfaction survey and benchmarking firm in outpatient healthcare, for becoming a new advertiser in the ASC Review. Learn more about CTQ Solutions.

10. MediGain, a back office business process outsourcer for healthcare institutions, for becoming a new exhibitor at the October conference. Learn more about MediGain.

11. Anesthesia Health Partners, an anesthesia staffing and practice management company, for renewing advertising on the Web site. Learn more about AHP.

12. Provation Medical, the creator of ProVation EHR, the first electronic health record designed for busy, cost-conscious ASCs, for renewing advertising on the Web site. Learn more about Provation Medical.

Upcoming ASC Events
ASC Transactions: Successful Strategies for Mergers, Acquisitions, Divestitures and Restructuring
July 24, 2008
Audio Conference

ASC Benchmarking and Case-Costing
Aug. 6, 2008
Audio Conference

Physician/Hospital Integration Efforts
Sept. 25, 2008
Audio Conference

15th Improving Profitability, and Business, Strategic, Clinical and Legal Issues for ASCs
Oct. 23 to 25, 2008

For a complete list of upcoming events, click here
Quick Links
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