From a state oversight process that killed an ASC rather than saved it to the federal government’s largest ASC antitrust action in history, here are five controversies that every operator should know.
1. The Oregon ASC that regulators couldn’t save
The Surgery Center of Southern Oregon, a Medford-based center that had operated for 29 years, announced it would close June 30 after Asante, a partial owner, withdrew its application to become the center’s sole owner May 1. The withdrawal came after nine months of engagement with Oregon’s Health Care Market Oversight program, during which Asante provided more than 400 pages of documents and responded to more than 100 supplemental questions from state health officials, including a request for three years of confidential payer contracts that Asante’s attorney challenged as inappropriate.
OHA’s 30-day preliminary review had been paused Nov. 14, when the agency requested additional information from the entities. The review remained paused for several months. Asante filed an emergency exemption request April 22 citing imminent insolvency. As of May 1, OHA had not acted on it.
In its withdrawal letter, Asante said the outcome represented “the closure of an important surgical access point for the residents of Southern Oregon and a loss of jobs during an already economically challenging time for the region,” and called for “a more constructive and balanced application of regulatory authority.”
The center’s closure resulted in 84 lost jobs. OHA said the review was paused because requested information had not been provided. Both sides disputed that characterization.
The case has become a flashpoint in the national debate over state healthcare market oversight laws, with critics arguing that well-intentioned anticonsolidation frameworks can produce access failures when applied inflexibly to financially distressed facilities.
2. The FTC’s first ASC mega-deal consent order
The Federal Trade Commission cleared Ascension’s $3.9 billion acquisition of AmSurg June 3, but required Ascension to divest seven AmSurg ASCs in markets where the combination would otherwise threaten competition: Nashville, Tenn., Panama City, Fla., Tulsa, Okla., Waco, Texas, and Wichita, Kan.
Six of the seven centers will be divested to SC Affiliates, an Optum and SCA Health affiliate. The seventh, in Panama City, will go to Florida Gastroenterology Center, a physician group that currently holds a minority stake in that facility.
Under the consent order, Ascension must also notify the FTC in advance of any future ASC acquisitions within the metropolitan areas surrounding the divested facilities for the next 10 years.
The order is the first time the FTC has imposed structural conditions on an ASC mega-deal, and it signals that regulators are watching market concentration in ASC with the same scrutiny they have historically applied to hospital mergers. The deal, once finalized, will give Ascension more than 300 ASCs across 35 states.
3. The anesthesia roll-up lawsuit
The FTC and U.S. Anesthesia Partners reached an agreement in principle April 23 to resolve antitrust litigation alleging USAP engaged in a decadelong scheme to consolidate anesthesia services in Texas, systematically buying up nearly every large anesthesia practice in the state to create a single dominant provider.
A federal court stayed the case on May 26 while USAP implements the required relief over the next 180 days. Settlement terms remain confidential.
The FTC alleged that USAP’s strategy and resulting dominance cost Texans tens of millions of dollars more each year for anesthesia services. USAP, a portfolio company of private equity firm Welsh, Carson, Anderson and Stowe, denied wrongdoing and said it settled to avoid the cost and disruption of prolonged litigation. A separate private class action on behalf of Texas patients who allegedly paid inflated anesthesia prices continues unabated.
Anesthesia markets in Texas may become more competitive following USAP’s implementation of the settlement’s required relief, shifting contracting dynamics for surgery centers that have had limited alternatives.
4. When the funding disappears
Heights University Hospital in Jersey City, N.J., which includes an ASC, closed immediately after being denied $25 million in funding. The closure was abrupt, with no wind-down period for patients or staff.
The case illustrates a vulnerability specific to ASCs embedded within or affiliated with financially marginal hospital entities: The surgery center’s fate is tied to the host institution’s balance sheet, not just its own. When the hospital’s funding fell through, the ASC went with it, regardless of whether the ambulatory program itself was operationally viable.
The pattern has appeared repeatedly across the closures Becker’s has tracked. Buffalo, N.Y.-based Kaleida Health also closed an ASC that had operated for more than 35 years due to federal funding issues. In both cases, the ASC was not necessarily the source of the financial problem.
5. When the state oversight law becomes an obstacle
Oregon’s anti-consolidation framework produced a second controversy in the same period. Vancouver, Wash.-based PeaceHealth’s plan to replace emergency services contracts at three Oregon locations raised questions as to whether the move violated the state’s recently passed corporate healthcare transaction law. PeaceHealth announced it would not renew contracts with Eugene Emergency Physicians, a move that critics argued triggered the Health Care Market Oversight program’s review requirements.
The case landed in the same policy debate as the Surgery Center of Southern Oregon closure: Oregon’s HCMO program, designed to protect patients from harmful consolidation, is now generating cases where its application is creating access disruptions rather than preventing them.
At the Becker’s 32nd Annual Meeting: The Business and Operations of ASCs, taking place October 29-31 in Chicago, ASC leaders, surgeons and healthcare executives will explore strategies to drive growth, enhance operational performance, navigate reimbursement challenges and prepare for the future of ambulatory surgery. Apply for complimentary registration now.