Transitioning From GI Office-Based Practice to ASC: 4 Blunders to Avoid

The office-based physician practice environment continues to grow more challenging. A number of gastroenterologists have seized the opportunity to transform an office practice into an ambulatory surgery center. While the switch can be appealing — opening a business driven solely by the bread and butter procedures of GI — it is not a simple one.

Roy Bejarano, president of Frontier Healthcare, outlines the process gastroenterologists must take to open an ASC and the potential pitfalls along the way. The process can take upwards of a year-and-a-half in a certificate of need state. "Aggressively, a project could be completed in a year to a year-and-a-half, more conservatively within two years." The steps to consider include:

•    Filing a CON application with the state's department of health
•    Eight month or more waiting period to go through the entire CON process and receive preliminary approval
•    Gather the necessary funding
•    Select a real estate site
•    Construction
•    Reach out to the Department of Health for final approval

Here are four common, and sometimes fatal, mistakes along the way that can derail a GI practice's plans.

1. Taking on the process alone. For the majority of physician practices, navigating the ASC regulatory environment, not to mention the specifics of real estate shopping and construction, is foreign territory. "The level of oversight required just to open the doors is significant," says Mr. Bejarano. While it is possible for a physician practice to single-handedly close the doors of its office and open those of an ASC, it is a risky proposition.

From creating an IT infrastructure to staffing and legal representation to CON concerns, a management company can offer a steady, guiding hand throughout the whole process. With practiced help, physicians can meet the demanding obligations of the transition, still practice during the interim and at the end of the road actually open a profitable ASC's doors.

2. Selecting the wrong management company. There are a number of management companies available for physicians to choose from, but not every company is right for every project. Choosing a company that is not a fit will waste valuable dollars and potentially even kill a project. The right company will have a number of qualities, easily identified up-front, such as:

•    Immediate transparency
•    Established track record in the local market
•    Commitment of resources and access to senior management
•    Creative leadership
•    Physician-centric culture

3. Partnering with the wrong people. An office practice will have a long list of established contacts from vendors to IT connections. "Physicians will often be comfortable with certain people and try to continue those relationships without thinking about the ramifications," says Mr. Bejarano. In some cases, these relationships can be continued, and productively so, but each contact should be evaluated for ability to support the ASC's business. "In every respect from OR technicians to your counsel, there is the right person and the wrong person," says Mr. Bejarano.

4. Real estate selection. In some cases an office's physical space can be converted to an ASC, but more often physicians will need to find a new piece of real estate. In CON states, the process requires real estate selection for the review process. It is important to find the right site without incurring significant rental expenses while waiting for CON approval, says Mr. Bejarano.

The site itself will require elements such as:

•    Capacity for future expansion
•    Proximity to other physician practice locations
•    Well-timed lease
•    Physical space that lends itself to ASC operations

"The site is chosen not just to please existing members, but potential future members as well," says Mr. Bejarano.

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