From: Becker Scott <>
Subject: OIG 2008 Work Plan to Focus on Physician Financial Relationships with Healthcare Facilities; Comptroller General of U.S. Sees Need for Overhaul of Healthcare System; Healthcare REITs Drive Sector Rebound; FASA, AAASC to Merge -- Understand the Background


October 8, 2007
In This Issue
FASA, AAASC Merging; OIG Releases 2008 Work Plan; GAO Head Predicts Healthcare Overhaul; REITs Rebound
Register Early for "Key Thoughts on the Orthopedics Industry" Webinar Dec. 5
Fewer Than 15 Spots Remain at Fall Conference
Companies to Watch
Ortho Webinar
FASA, AAASC Merging; OIG Releases 2008 Work Plan; GAO Head Predicts Healthcare Overhaul; REITs Rebound

FASA, AAASC to merge Jan. 1. The nation's two largest ASC associations have announced that they are merging, the culmination of five months of discussions between the American Association of Ambulatory Surgery Centers, FASA and the Foundation for Ambulatory Surgery in America (known as the Foundation). Beginning Jan. 1, this unified organization will be known as the Ambulatory Surgery Center Association.

"On this same day, Medicare will begin to implement the biggest change in its ASC payment system in the last 20 years," write the associations in a press release, "a development that underscores a major benefit current AAASC and FASA members will realize as a result of this merger: the value that the combined strengths and resources of both associations can offer them as they go about attempting to influence Medicare policy and national legislative initiatives that support ASCs."

The real story of this merger is threefold. First, the ASC industry has arrived to a point where it has a significant place amongst organizations in Washington, D.C., and other major healthcare trade associations. It will benefit from a stronger and more unified voice on Capitol Hill. Second, Kathy Bryant has grown and helped drive FASA to such a point where it has become so important to the ASC industry that this type of merger became an expected event. Kathy has done an incredible job of stating the case for ASCs and developing FASA into a world-class organzation. Third, Craig Jeffries, the executive director of AAASC did a very impressive job of raising the importance and relevance of AAASC as a No. 2 trade association in the ASC field. His accomplishments deserve significant acknowledgement. If not for his efforts and those of his board, there may not have been a AAASC worthy of a merger. He did a very impressive job.

To join FASA, please call (703) 836-8808.

OIG's fiscal 2008 work plan to review physician payments, financial relationships. The Office of Inspector general says it will audit and evaluate Medicare payments to physicians, particularly where imaging services are provided at facilities in which physicians have financial interests, as part of its 2008 work plan. Physician-owned hospitals will be under further scrutiny:

"We will review indicators of patient care and safety in physician-owned specialty hospitals. Hospitals are required to comply with the Federal requirements set forth in the Social Security Act at section 1861(e) to ensure that Medicare beneficiaries receive care and services pursuant to 42 CFR Part 482, Conditions for Participation for Hospitals.

Site of service will be another key issue for review, says the OIG:

"We will review physician coding of place of service on claims for services performed in ambulatory surgical centers and hospital outpatient departments. Federal regulations ... provide for different levels of payments to physicians depending on where the services are performed. Medicare pays a physician a higher amount when a service is performed in a non-facility setting, such as a physician's office, than it does when the service is performed in a hospital outpatient department or, with certain exceptions, in an ASC. We will determine whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments."

Comptroller General sees need for government payment overhaul. The only thing certain about the future of Medicare and Medicaid payments is that "the status quo is not an option," said David M. Walker, comptroller general of the United States, before KPMG Partners' Meeting, in Arlington, Va., last week. "We face large and growing structural deficits largely due to known demographic trends and rising healthcare costs. GAO's simulations show that balancing the budget in 2040 could require actions as large as cutting total federal spending by 60 percent or raising federal taxes to two times today's level." Mr. Walker stressed that faster economic growth can help, but cannot solve the problem: "As a result, we simply cannot grow our way out of this problem. Tough choices will be required," he said. You can download a pdf of "Fiscal and Health Care Challenges" (GAO-08-158CG, Oct. 3).

Healthcare leads REIT rebound. After a cooling off period in real estate brought on by the recent subprime mortgage meltdown, investors are slowly returning to real estate investment trusts, and the healthcare sector is leading the way. Healthcare tops the third-quarter REIT property focus indexes with total returns up 11.1 percent in the third quarter. Investors appear to be betting on long-term need for and attendant growth of healthcare facilities, says the Wall Street Journal (Oct. 3 edition).

Sign FASAPAC's solicitation authorization form. To help FASAPAC, FASA's political action committee, better serve ASCs, please download the solicitation authorization form, fill it out and return to FASAPAC.

Share your success story. We are seeking highly successful ASCs that have no management company involvement whatsoever to feature and discuss their prescriptions for success in case studies. If your ASC fits the bill, please e-mail Scott Becker or Stephanie Wasek. Also, if you have an ASC-related legal or business question, e-mail Scott, and we'll publish the answer in a future E-Weekly. Call for proposals. We are seeking speaking proposals for the Orthopedic, Spine, and Pain Management Driven ASC Conference, to be held in Chicago June 19 to 21. Should you have suggestions, please e-mail Scott Becker.

Save the dates for next year's conferences! Please save the following two dates for next year's conferences:

  • Orthopedic-Driven ASC Conference -- June 19 to 21, 2008

  • FASA and ASC Communications: Improving Profitability and Business and Legal Issues for ASCs -- Oct. 23 to 25, 2008.

Thank you to conference sponsors. We'd like to extend our thanks to the outstanding sponsors helping to make our fall conference a success.

Gold sponsors
  • Surgery Consultants of America: conference tote bags
  • Symbion: Friday's networking reception

  • Silver sponsors
  • Eveia Health Consulting & Management: Friday's morning break
  • National Surgical Care: Conference at a glance
  • QSE Technologies: Cyber cafe

  • Sponsors
  • Foundation Surgery Affiliates: Bottled water
  • NovaMed: Thursday's networking break
  • newest fall conference ad
    Register Early for "Key Thoughts on the Orthopedics Industry" Webinar Dec. 5
    At a Glance: "Key Thoughts on The Orthopedics Industry"

    What you will learn: There are two issues that will be the focus:

    1. A forecast for the next 10 years in orthopedics; and

    2. how ASCs, hospitals and medical device companies should work with orthopedic surgeons.

    Who should attend: C-level hospital leadership, vice presidents and other leaders who who work in a orthopedic-physician-relations capacity, and orthopedic physician leaders.

    When: Wednesday, Dec. 5 at 2 p.m. CST (running time: 60 to 90 minutes)

    About the speakers: John Cherf, MD, MBA, MPH, is an orthopedic surgeon at the Chicago Institute of Orthopedics, a clinical advisor for Sg2 and a thought-leader in orthopedics. Dr. Cherf founded the Midwest Orthopedic Institute, an orthopedic physicians group with full integration of diagnostic imaging, rehabilitation, ambulatory surgery and occupational medicine under one roof. He presently practices in Chicago and is once of the founding members of the Chicago Institute of Orthopedics. With more than 15 years' experience and fellowship training in sports medicine, he has served as team physician for several collegiate and professional sports teams in addition to U.S. Soccer. Dr. Cherf has published in numerous peer review journals, speaks internationally, and serves on several advisory boards for healthcare-related businesses.

    Scott Becker, JD, CPA, is a partner in and co-chair of the health depatment at the national law firm of McGuireWoods in Chicago. For more information, visit his McGuireWoods profile or

    Cost: $199 if registering before Nov. 19 (save $50!).

    How to register: There are five easy ways.

    1. Fill out and submit the online registration form.

    2. E-mail Jessica Cole.

    3. Call us toll-free at (800) 417-2035.

    4. Download the printable registration, fill out and fax to (866) 678-5755.

    5. Download the printable registration, fill out and mail to 315 Vernon Ave., Glencoe, IL 60022.
    Quote ad
    Fewer Than 10 Spots Remain at Fall Conference

    We are expecting a very full house for the 14th Annual Ambulatory Surgical Center Conference on Improving Profits and Business and Legal Issues for ASCs. The No. 1 networking and business development opportunity for ASCs and ASC companies in the country will be held next week -- Oct. 18 to 20 -- at the Westin Michigan Avenue in Chicago. Because it attracts the highest level audience and the very best speakers possible, registration spots are filling up. Fewer than 10 remain! There are three ways to register:

    1. Download the registration form and fax it to FASA at (703) 836-2090;

    2. Download the registration form and mail it to FASA, 1012 Cameron St., Alexandria, VA 22314; or

    3. simply call FASA at (703) 836-5904.

    The Westin Michigan Avenue is SOLD OUT. For your convenience, we have compiled a list of nearby hotels. You can download it here. We can also provide you additional hotel choices. Don't miss out -- register today!

    Companies to Watch

    We are delighted to highlight the following companies in this week's E-Weekly.

    HealthCare Appraisers. HealthCare Appraisers is a nationally recognized valuation and consulting firm providing services exclusively to the healthcare industry. Services include the following:

    • Fair Market Value opinions for compensation and service arrangements (including but not limited to employment; on-call; medical directorships; collection guarantees; "per click" equipment leasing; billing under arrangements; and block leasing);
    • Business Valuation (including but not limited to ASCs, hospitals, dialysis centers; home health, diagnostic and other treatment facilities, physician practices, and intangible assets);
    • Consulting and Advisory Services; and
    • Litigation Support.

    Please visit Healthcare Appraisers' Web site or call the Delray Beach, Fla., office at (561) 330-3488 or the Denver, Colo., office at (303) 688-0700.

    SourceMedical Solutions. SourceMedical is the leading provider of outpatient information solutions and services, collectively serving ASCs, rehabilitation clinics and diagnostic imaging centers. Its unique end-to-end systems improve operational efficiency and cash flow while empowering healthcare facilities to deliver a higher standard of patient care. SouceMedical's solutions strengthen and enhance overall clinical, financial and administrative processes. More than 2000 ASCs and surgical hospitals nationwide use the company's Vision, AdvantX and SurgiSource solutions. SourceMedical continues to invest in research and development to maintain its leadership position with innovative products and services that satisfy the specific requirements of this unique market.

    Physicians Endoscopy. Physicians Endoscopy develops and manages endoscopic ambulatory surgery centers in partnership with practicing GI physicians and hospitals. We currently partner with 150+ physicians in Arizona, California, Florida, Indiana, Michigan, North Carolina, New Jersey, Ohio, Pennsylvania, Texas and Washington. The company's physician and hospital partners enjoy majority equity ownership and maintain all facets of local control, while PE holds a minority ownership position. It's 14 operating centers provide services to 125,000+ patients annually. The company has five additional centers under development. The strategy is simple: service. Physicians Endoscopy is forthright, reliable, and communicative, and we deliver upon expectations and promises. Additionally, its centers regularly deliver a greater-than-50 percent profit margin. Visit them on the Web at", or e-mail John Poisson or call him at (215) 589-9003.

    *           *           *

    If you have any questions on any of the items listed in this letter, please contact me at (312) 750-6016 or by email at

    Very truly yours,
    Scott Becker

    Scott Becker, JD, CPA
    (312) 750-6016

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