Presenting a live 90-minute webinar with interactive Q&A Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risks WEDNESDAY, JUNE 7, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Curtis H. Bernstein, CPA/ABV, ASA, CVA, MBA, Principal, Pinnacle Healthcare Consulting , Denver Melissa Szabad, Partner, McGuireWoods , Chicago The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk Presented by: Melissa Szabad, McGuire Woods, LLP Partner Curtis Bernstein, Pinnacle Healthcare Consulting, LLC Principal www.mcguirewoods.com
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk I. The Transaction Process A. Non-disclosure/confidentiality agreement 1. Negotiation of NDA 2. Exchange of information and documentation 3. Commencement of negotiations 6 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk B. Letter of intent/term sheet 1. Continued due diligence 2. Negotiate material terms 3. Non-binding LOI 7 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk C. Definitive documents 1. Negotiate definitive documents D. Closing 1. Execute and deliver transaction documents 2. Satisfy all “conditions to close” 8 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk II. Due Diligence A.Compliance with anti-kickback, self-referral and fee splitting statutes and regulations: 1. Sale of Interests a. Fair Market Value b. Offering of Units based on value or volume of referrals c. Reallocating Units based on value or volume of referrals 9 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk 2. Redemption Issues a. Forced redemptions based on value or volume of referrals b. Litigation risk c. Anti-Kickback risk 10 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk 3. Safe Harbor Compliance a. Compliance with 1/3 tests and other requirements b. Uniform enforcement 11 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk 4. Compensation Arrangements with Physicians a. Anesthesia Arrangements I. Federal Anti-Kickback: OIG Advisory Opinion No. 12- 06 (company and management fee models) II. State Issues: anti-kickback, corporate practice of medicine, fee splitting 12 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk a. Anesthesia Arrangements I. Employment of Anesthesiologists Number of 25th 75th 90th Providers Percentile Median Percentile Percentile 2016 Compensation per FTE 6,682 $364,785 $425,380 $489,966 $579,383 Average ASA Units 2,859 8,430 11,439 15,646 19,762 2016 Collections per FTE 2,227 $339,511 $476,808 $639,638 $831,569 Average Compensation per ASA Unit 2,754 $27.00 $36.69 $53.08 $65.07 Average Professional Collections per ASA Un 999 $29.07 $40.96 $51.16 $59.97 13 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk b. Medical Director and other Personal Service Agreements I. Safe harbor compliance II. Time sheets III. Fair market value IV. Legitimate services actually rendered V. Stacking 14 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk b. Medical Director and other Personal Service Agreements III. Fair Market Value i. Services rendered versus rendering physician ii. Administrative compensation versus clinical compensation IV. Legitimate services actually rendered i. Time sheet review process V. Stacking i. Benchmark data includes all compensation at both the aggregate and per wRVU levels Producing at 90 th level productivity does not mean compensation for ii. clinical services is set at 90 th percentile compensation per wRVU 15 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk II. Due Diligence (continued) c. Equipment and Real Estate Leases I. Safe harbor compliance II. Fair market value III. Lithotripsy arrangements-per click, global billing, different arrangements for Medicare/Medicaid and commercial IV. Femtosecond lasers — global billing, IOLs 16 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk c. Equipment and Real Estate Leases II. Fair Market Value i. Full time exclusive lease versus block lease ii. Accounting for all services provided and risks taken iii. Credit risk and term of lease III. Lithotripsy Arrangements i. Per click versus half day ii. Mobile versus on-site iii. Bilateral and multiple procedure issues (lithotripsy and lasertripsy) 17 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk d. Management Agreements I. Safe harbor compliance II. Fair market value 18 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk d. Management Agreements II. Fair Market Value i. Services provided ii. Rate of return to management company iii. Time versus task 19 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk B. Billing and Coding Audit and Review 1. Medicare/Medicaid audits or reviews 2. Private payer recoupments, out-of-network issues 3. Private pay/non-covered procedures (ABNs, physician global billing) 20 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk C. Anti-Trust 1. Review of payor contracts 2. Payor contracting negotiations post-closing 21 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk D. Compliance with conditions of participation 1. Look for other uses in the facility (physician office space, shared common areas) 2. Disclosure of physician ownership 3. 23-hour stay, recovery care 22 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk E. Licensure, CON and Accreditation 1. Do the number of operating and procedure rooms match what is on the license or CON? 2. Have prior changes in ownership been reported? 3. Is license and accreditation current? 4. Any survey issues or plans of correction? 23 | McGuireWoods
Ambulatory Surgery Center Acquisitions: Meeting Regulatory Requirements, Conducting Due Diligence, Minimizing Risk F. Litigation and Liens 1. Run searches early 2. Need time to have liens removed 24 | McGuireWoods
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