Here are five things to know about equity investment:
1. A newly formed entity with no facility, no license and no payer contracts should be valued at significantly less than an ASC with even a short operating history.
2. Mr. DeVault recommends obtaining a formal valuation from an independent third-party valuation firm with specific experience valuing ASCs to avoid violating anti-kickback rules.
3. Some ASCs just pick an equity price that they find meaningful, Mr. Devault said. But if a competing facility charges something distinctly different, he wrote, it could trigger a government investigation.
4. A below-fair-market-value arrangement sometimes forms out of habit or because of a concern that newer physicians may not be able to afford the buy-in.
5. When a physician retires or stops using an ASC, there are no longer referrals from that physician back to the ASC, and so no kickback violations can occur.
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.