For surgeon-owned ASCs, the paperwork may matter as much as the protocols.
A review published Nov. 1 in the Journal of the American Academy of Orthopaedic Surgeons argues that ASC success often depends less on clinical care than on the contracts behind it. While clinical protocols have made safe outpatient care possible, ASC performance is often driven by nonclinical infrastructure, wrote authors Khalid Yousuf, MD, of Dallas-based Baylor Scott & White Health; R. Michael Meneghini, MD, of the Indiana Orthopedic Institute in Noblesville, Ind.; Michael Ast, MD, of the Hospital for Special Surgery in New York City; and Ahmed Siddiqi, DO, of the Texas Center for Joint Replacement at Texas Health Resources in Plano, Texas.
The authors described surgeon-owned centers as regulated financial entities. In their view, operating agreements and a layered set of contracts shape reimbursement, overhead exposure, throughput, compliance risk and long-term equity value.
The operating agreement sits at the center of that structure. It sets governance authority, ownership rights, capital obligations, profit distribution, dispute resolution and how buy-sell valuations are calculated. Managed care contracts then determine whether individual procedures are financially viable, including implant reimbursement, denial and recoupment risk, audit exposure and escalation provisions.
The authors singled out the lease as a particular risk, calling it the largest fixed liability and one that may decide whether a center survives when reimbursement shrinks. Other agreements also play a role. Equipment, purchasing, anesthesia and staffing contracts affect capacity and cost control, while revenue cycle and IT contracts influence collections and cybersecurity exposure.
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.
