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Anesthesia Society renews OIG request to ban "Company Model" used by ASCs

August 31, 2010

Analysis of:ASA Renews Request for Action from OIG on “Company Model” | www.asahq.org

The "Company Model" is a loophole successfully devised by crafty lawyers to circumvent the intent of the Federal Stark Laws and Antikickback Statutes, whereby, the surgeons have been profiting form their referrals to Anesthesiologists in their own ASCs, simply by employing the Anesthesiologists in a sham "Company".Almost all GastroIntestinal (GI) Endoscopy based ASCs and some Multispecialty ASCs have eagerly adopted this questionable practice and have artificially bloated bottom lines, making them "Hot" investment commodities for Private Equity and and other investment groups, that happily pay huge multiples of these bloated EBIDTAs.The American Society of Anesthesiologists (ASA) has submitted evidence to the Office of the Inspector General (OIG) of the blatant violation of the intent of the laws, and the blatant consequences of this self referral as seen in the overutilization of services  etc.An OIG verdict labeling this questionable practice illegal and punishable under the laws will be fatal to ASCs relying on this mechanism for their profitability and investors should be vary and correct the EBIDTAs to only reflect Facility Fees component  and discount the Anesthesia component, in evaluating the suitability of acquiring these "hot" commodities.

Are Ambulatory Surgery Centers (ASCs) double dipping with the "Company Model"?

June 4, 2009

Analysis of:OIG acknowledges ASA request for Special Advisory Bulletin about the "Company Model" | www.asahq.org

 Surgeon and GI owned ASCs partnering with national management companies, like ASCOA, Amsurg are "hot" commodities these days for Private Equity firms because of their recession-proof nature,  and burgeoning profits. The source of their huge profits, though, are being questioned by the American Society of Anesthesiologists (ASA), who have complained to the OIG that the "Company Model" that the ASCs employ to include the Anesthesia funds, are at best a gray area, and at worst,  a clear challenge to the intent and  sanctity of the Federal Stark Laws and Antikickback statutes, which are meant to serve as a firewall for preventing the referrers from profiting from their referrals. If in it's Special Advisory Bulletin, the OIG agrees with the ASA's position, it will have a major chilling effect on the profits of these ASCs, and   the ASCs may be in danger of violating the laws that are punishable with triple damages, expulsion from Medicare and even jail time.

Physician Independence in Health Care Reform

May 25, 2009

Analysis of:Achieving Health Care Reform--How Physicians Can Help | content.nejm.org

Contrary to  popular belief,  the palliative effects of buzz words like integrated care, managed care , performance based compensations etc may sound utopian in non-clinical settings like  Wall Street, the Congress and even Main Street, but as a physician in private practice, I can assure you that any healthcare system, bereft of physician independence at it's core, is necessarily fatally flawed - the Mayo Clinics and Geisingers of the world not withstanding. As someone who  fled such an "integrated, socialist, and corrupt" healthcare system in the India of the late 1980s, the U.S. health system, flawed as it was in many ways, provided the liberating  gasp of fresh air in the independence that all  scientists and doctors yearn for, after dedicating the prime of their youth training for such an opportunity. Healthcare reform should look to big ticket items like liability reform, administrative reform, fraud and abuse etc before they pick on doctors.

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