Three Anesthesiology Options for ASCs (And Why You Should Be Cautious)
The success of your ambulatory surgery center depends on the efficient and compliant use of clinical personnel—including anesthesia providers. Review the benefits, drawbacks, and legal ramifications of three common ways to structure the relationship.
It’s one of the most significant decisions for an ambulatory surgical center (ASC) today: what type of relationship to have with your anesthesia providers. To make this determination, you’ll need to evaluate the anesthesia services your practice uses, along with the likely legal and contract issues that might arise.
Begin by evaluating the role of anesthesia in your practice, including the frequency and procedures with which it’s most used. As we’ll explain below, the quantity of anesthesia you require often determines what type of relationship would be most advantageous to your practice. And be sure to discuss your ASC’s needs with the anesthesia provider that you work with. Everyone should fully understand the expectations going in.
When both sides are clear about what services are needed and what services are available, your attorney can help craft a relationship that avoids violating the Anti-Kickback Statute, Stark Law, and related federal healthcare laws. We’ll talk more about those laws below.
Three Types of Relationships with Anesthesiologists
On-staff MD / CRNAs Employed by the ASC
If your practice uses anesthesia often, you might want to consider hiring an MD or a CRNA as an employee of your ASC. An employment arrangement would allow you to have a qualified member always available on staff without constantly worrying about independent contractors or looking for a new hire.
In this arrangement, your ASC provides a salary to an MD or CRNA in exchange for their anesthesia services. This relationship has grown popular among ASCs who wish to increase their profit margin. And if there is a shortage in the number of anesthesia providers, having a provider on-staff at your ASC helps you avoid ongoing competition for a scarce resource.
However, an on-staff anesthesia provider brings administrative responsibilities. You’ll need to negotiate an employment contract, arrange for appropriate coverage during vacations, and manage the coding and billing of the services. Many consider anesthesia to be a separate business altogether from running an ASC, as billing and personnel issues can vary significantly between the two.
If your on-staff anesthesiologist or anesthetist suddenly becomes unavailable for any reason, or even if they are currently working on a patient, you could end up struggling to find a replacement at a moment’s notice.
Beware overestimating how often you need anesthesia services. During periods of low volume, your salaried employee may have costly downtime.
A Non-Exclusive Contract With an Outside Anesthesia Group
Another option for your practice is to establish a non-exclusive contract with an outside anesthesia group. This type of arrangement allows your ASC to maintain relationships with multiple groups, giving you more access to diverse specialties, and facilitating procedure scheduling availability and flexibility.
However, when contracting with an outside anesthesia group, your ASC will not have immediate access to that group’s resources and practitioners. This can present a challenge if your ASC handles emergent or urgent procedures that would necessitate an on-site or on-call anesthesia team. With this type of arrangement, there is usually no compensation agreement between the ASC and the anesthesia group. The anesthesia group will receive all professional fees for anesthesia services.
In a similar vein, it’s possible to form a non-exclusive contract with an individual anesthesiologist or anesthetist instead of an entire group. However, one of the many benefits of working with an anesthesia group is the availability of a large pool of qualified professionals. If your ASC starts working with an anesthesiologist or anesthetist, and you find this individual does not work well within your ASC’s work environment, a group contract allows you to request a different member.
Whether you contract with an individual or a group, non-exclusive arrangements can be more susceptible to market forces. You’ll pay higher fees if your area is suffering from anesthesia provider shortages. And when competition for anesthesiologists and anesthetists is high, low-volume ASCs may pay even steeper up-front rates than busier facilities or be forced to provide stipends to make up for periods of insufficient unit production.
Nonetheless, a non-exclusive relationship can work well for a practice that rarely uses anesthesia but wants to have the option available. You can ensure that if you ever need the service, that you have quality anesthesia clinicians available with little risk.
An Exclusive Contract With an Outside Anesthesia Group
Even if you don’t have the volume necessary to employ a full-time anesthesia provider, your ASC may find it best to enter into an exclusive contract with an anesthesia group.
Your ASC may be able to streamline the schedule between your practice and the group more effectively and ensure that there is consistent care. And even though the anesthesia group is not an official part of your ASC—meaning you’re not responsible for managing their billing, payroll, human resources, insurance, etc.—you will likely benefit most by treating them as members of your team. The anesthesia providers may be more efficient and financially savvy if they feel that they are part of your ASC’s success, not outsiders that you’ve hired to do a job.
What You Should Look Out For
When establishing a relationship with an anesthesia provider, your practice needs to be cautious. ASC’s can be covered under Medicare and Medicaid— and thus are subject to the Antikickback Statute (AKS) and Stark Law. In particular, pay close attention to exclusive relationships – these are most likely to fall into kickback territory.
What Impact Does AKS Have?
The Antikickback Statute (AKS) states that a referral cannot be encouraged intentionally through payment (anything of value) for a service that falls under a federal healthcare program (i.e., Medicare). And while there are safe harbors that protect ASCs and its physicians, specific requirements must be fulfilled. “Safe harbors” are built-in exceptions to AKS, and AKS allows entities to tell their story of why an exception should cover them. It can be tricky to identify when an exception exists, as many do, and each case varies.
AKS is designed to prevent physicians’ medical judgment from being clouded by money. So, if you decide to start a relationship with an anesthesia group, be sure that your dealings are an accurate assessment of the value of the services— that they are at the “fair market value,” that is, a reasonable price based on what the current market looks like.
What Impact Does Stark Law Have?
The Stark Law, while similar to AKS, has critical differences. First, Stark Law is only an issue when a physician is the one making a referral. And the referral must be for a “designated health service,” something defined in the statute which ranges from clinical laboratory services to outpatient prescription drugs. The physician must also have a financial relationship with the entity, and the entity must accept Medicare.
Second, Stark Law is a strict liability statute, which means that even if your practice makes a good faith mistake, it does not matter. Stark Law does not care about your intentions, only your actions, so you will be found guilty even if you did not intend to do any harm.
In the future, your practice must make sure that you fulfill all the requirements to be Stark-compliant. You cannot afford to make a mistake. You may, for example, face stiff penalties for forming a contract that will last for less than a year with an anesthesia group, failing to provide the proper documentation to support that you have done the fair market value, or forgetting to sign in one area of an important document.
Stark Law is analyzed on a case-by-case basis. If your practice is worried about violating Stark, consider contacting an experienced healthcare attorney who can examine the legality of your practice, and help you navigate the minefield.
This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader and should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.