4 crippling ASC pro forma mistakes to avoid

Developers make four major mistakes when putting together ASC pro formas, according to HCTadvisor

Here are the mistakes to avoid:

1. Not knowing case volume. HCTadvisor reports a shocking number of surgeons don't know how many surgeries they perform. Developers should find out physician case volume, the types of surgeries performed and their payer mix by gathering billing data from practice managers and hospital partners.

2. Predicting reimbursement rates incorrectly. While most payers piggyback on Medicare reimbursement, it's difficult to make reimbursement projections for the various commercial payers in the market. In most markets, commercial rates are typically between 110 percent and 140 percent of Medicare reimbursement. Commercial payers usually do not bundle implantable devices.

3. Lacking construction contingency plans. Developers should have line items in the budget for contingency, adding at least 10 percent contingency for construction costs. Costly ASC change orders can be minimized by hiring architects and life safety consultants with expertise in ASC development.

4. Failing to budget working capital. It's important to budget extra cash for at least six months of operating expenses, accounting for projected rent, staff, utilities and debt payments. This money should be included in initial ASC funding.

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