Why endoscopy centers should consider employing anesthesiologists now — Attorney Ann Bittinger explains

Gastroenterology practices may violate anti-kickback legislation when they form their own wholly owned anesthesia subsidiary and use that company to provide services at their own endoscopy center, but there is another way.

Bittinger Law Firm attorney Ann Bittinger explained the risks gastroenterology practices face by not having ancillary anesthesia services and provided insights into how centers and groups may find a solution by employing anesthesia providers.

Note: Responses were lightly edited for style and content.

Question: What risks do ASCs face from not having an ancillary anesthesia service agreement?

Ann Bittinger: The Office of Inspector General of HHS has opined that it violates the federal Anti-Kickback Statute for gastroenterology groups to own their own anesthesia groups that provide anesthesia at their endoscopy centers. The OIG called the model the "company model," where gastroenterologists form their own wholly owned anesthesia company subsidiary and employ certified registered nurse anesthetists or anesthesiologists to perform services only at their endoscopy centers.

The problem with this, according to the OIG, is that GI doctors get indirectly what they couldn’t get directly: profits from referrals for anesthesia services. This begs the practical question of how an endoscopy can be done without anesthesia, and therefore whether there is a true illegal referral or improper inducement.

The federal Anti-Kickback Statute is criminal, so surgeons and gastroenterologists who own ASCs and endoscopy centers potentially run the risk of going to federal prison if they use the company model. To date, however, all criminal prosecutions of gastroenterologists and surgeons under this theory have sputtered. No one, to date, has gone to jail for this.

Q: What are the benefits of employing anesthesiologists?

AB: Although I may be going out on a limb here, I think that OIG attorney Greg Demske left room when he wrote Advisory Opinion 12-06 for an ASC or endoscopy center to legally directly employ anesthesia providers.

Some of the dicta in the advisory opinion indicates that the fact that the surgeons/GI doctors form, own and control a completely separate company to perform anesthesia services is, in the OIG's opinion, the core problem. Although in no way does any advisory opinion or other guidance from HHS approve direct employment, there isn't a blanket prohibition either. And there is a legal distinction between the two models.

Q: How would you suggest an ASC go about deciding whether to form its own anesthesia group or to contract with an independent group or perhaps employ their own anesthesiologists?

AB: There's a phrase here in the South, where I practice, that is apropos: Pigs get fat but hogs get slaughtered. I advise my clients to ask themselves if they want to be the pig or the hog.

Healthcare is a highly regulated industry. Administrators should understand when to be satisfied with enough and when their actions might be greedy considering current enforcement efforts. A normal entrepreneurial action in any other industry might be good business, but in healthcare, under the federal Anti-Kickback Statute and Stark Law, it is clearly hog-like — criminal greed.

I suggest administrators understand the risks of going forward with or continuing to use the company model, and I ask: How much money are you really making — and how many headaches and how much indirect malpractice risk are you taking — by having your own anesthesia company when you aren't an anesthesiologist?

From there, I encourage clients to send out requests for proposals to local or regional anesthesiology provider groups. Ask for administrative service and patient care service proposals; evaluate them; get a feel for which groups could provide what services; and [then] consider the possibility of directly employing anesthesiology providers. Before entering into negotiations, check with private payers to make sure they will reimburse the center for employed anesthesiologists.

Q: What are some common obstacles ASCs need to overcome when contracting with an anesthesia group?

AB: The ASC and the anesthesia provider group will enter into a master services agreement for the provision of anesthesia. ASCs often examine scheduling and anesthesia pricing first, and rightfully so, but [I urge them to] not neglect issues like supervision of overall control and direction of the anesthesia service line. The content of the MSA differs based on the type of center it is. For example, an aesthetic surgery center where procedures are self-pay would have a much more robust fee schedule (on what the center pays the anesthesia group or what the group bills the patient) than the MSA for an endoscopy center (where the reimbursement form private and public payers is rather straightforward). ASCs should account for things like longer-than-normal shifts and increase in volume and anesthesia provider no-shows, on a practical basis. Remember to always be very clear on who is billing whom for what.

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