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Regulatory Affairs
OIG Questions Legality of Multi-Specialty ASCs
An Office of the Inspector General advisory opinion concludes that multi-specialty ASCs may be illegal under the federal Anti-Kickback statute, and the OIG says it could potentially impose administrative sanctions on such facilities.

Opinion 03-5 addresses a proposed ASC joint venture between a hospital and a multi-specialty physician group comprised of seven surgeons and 46 primary care physicians; the ownership plan calls for 51 percent physician ownership and 49 percent hospital ownership. The problem? Some of the physician owners would not perform surgery at the ASC, so the OIG worries that the ASC would be a channel for physician investors to profit from referrals without having to do the work.

The OIG's analysis could spell trouble for joint-venture multi-specialty ASCs with this type of ownership structure. Moreover, OIG appears to be saying that other multi-specialty groups that own ASCs could be violating federal law. How can your group partnership protect itself?

Healthcare lawyer Joseph Sowell III, JD, of Nashville, Tenn.-based Waller Lansden Dortch & Davis, PLLC, says that, optimally, you should design your ownership structure within the OIG's "safe harbor" for group practices.

The ASC safe harbor requires that each physician owner of the center be a physician who receives one-third of his practice income from performing on-site procedures from Medicare's ASC procedure list. This "one-third-income test" theoretically ensures that physician owners of ASCs use them as an extension of their practices. The group-practice safe harbor permits primary care physicians and surgeons who are part of the same group to make referrals to each other for services, including ambulatory surgery.

Even if a joint venture does not meet the safe harbor, that does not mean the arrangement is unlawful; it does mean the arrangement could be subject to additional scrutiny by the OIG. To protect yourself:

  • Exclude outside physician investors. The group-practice safe harbor is inapplicable if a primary care physician who is a group member refers patients to a surgeon who is not.
  • Divide profits properly. The income from the ASC should pay group overhead or be distributed among the owners of the group in proportion to their ownership.

- Stephanie Wasek

MAC Cataract Reimbursement
Medicare Carrier Reverses Proposal
Noridian, the primary Medicare carrier for 11 states in the western U.S., has withdrawn a proposed policy that would have denied facilities reimbursement for monitored anesthesia care during cataract/ lens surgery (CPT 00412). The company had said it need not approve MAC services for most cases because an ophthalmologist could provide routine anesthesia. Noridian would have reimbursed for MAC in cataract surgery only if the patient had certain conditions, such as heart disease, hypertension, morbid obesity or a metabolic disorder.

Hand Hygiene
Compliance Remains Low
A 40-hour observational study at a hospital ICU concluded that hand-hygiene compliance remains low, even in higher-risk settings. The study, in the American Journal of Infection Control, found a 22.1-percent compliance rate in 589 opportunities to practice proper hand hygiene, such as hand washing, concomitant glove use and isolation precautions. Only three of 63 staff members used appropriate asepsis technique after their hands were exposed to multiple sites and secretions. Some studies suggest hand-hygiene compliance may be even lower in outpatient settings, where turnover is rapid and patients tend to be healthier and at lower risk for infection. The AJIC study did find that workers educated about proper glove use are much more likely to practice good hand hygiene.

Ophthalmology Trends
Survey: Higher Phaco Volume Cataract Surgeons Head to ASCs

  • 46 percent of surgeons who do 51-to-75 cases per month and 53 percent who do 76 or more perform all of them at an ASC.
  • 30 percent from each group do most cases at an ASC and some at the hospital.
  • 51 percent of those who do 25-to-50 phaco cases a month (the majority of ophthalmologists) do all or most of their cases an ASC.
  • 30 percent of the 25-to-50 cases crowd work only in the hospital.

    Another key finding: 44 percent would stop doing cataract surgery if Medicare reimbursements for surgeons drop to $500 or below. Cataract-removal/lens-insertion cases account for one-third the volume of Medicare facility reimbursement claims and half of Medicare payments to ASCs, according to the Medicare Payment Advisory Commission.

    Worker's Comp Cases
    Calif. Aims to Curb Self-Referral
    Here's how the bills the California Legislature is considering to revamp the state's troubled workers' compensation system would affect ASCs:

    • SB354 would prohibit a doctor from referring workers' comp patients to a surgery center in which he has a financial interest.
    • SB228, AB1482, AB597 and AB595 would impose fee schedules.
    • AB1483 would mandate that every physician who treats an injured worker be certified by the Industrial Medical Council as a Qualified Workers' Compensation Physician.

    Anesthesia Safety
    Study: No Difference in Anesthesiologist, CRNA Death Rates
    Whether anesthesia is provided by an anesthesiologist, a CRNA or an MD/CRNA care team, death rates do not differ with statistical significance, reveals a study of 404,194 outpatient and inpatient cases from 1995 to 1997.

    The study, published in AANA Journal, examined surgical cases in which the anesthesia provider was clearly documented, and accounted for variations due to case mix, clinical risk factors, facility characteristics and geography.

    Fast Tra\cks

    • The death of 3-year-old Hannah Yutzy, who died March 13 after a tonsillectomy at Clinton County Outpatient Surgery in Wilmington, Ohio, has been ruled an accident caused by post-surgical complications. According to the Montgomery County (Ohio) Coroner's Office's report, Hannah died because of respiratory arrest due to acute morphine intoxication. The autopsy report notes that "other significant conditions, including unsecured airway following general anesthesia" were present...
    • West Palm Beach, Fla., hand surgeon Mas G. Massoumi, MD requires his patients to sign a binding arbitration contract that would send the two sides to arbitration (one legal scholar and two medical scholars would decide the case) rather than to court if any disputes arose. In this era of soaring medical malpractice premiums, Dr. Massoumi's "arbitrate, don't litigate" idea is catching on among physicians...
    • Laboratory tests have found that Sporicidin Disinfectant is effective against Coronavirus, described by the Centers for Disease Control as the causes of Severe Acute Respiratory Syndrome (SARS)...
    • Three New York City-area orthopedic surgeons are suing WellChoice, the parent company of Empire BlueCross/BlueShield in New York, over reimbursement denials for multiple procedures performed with a single surgical incision. The surgeons, who practice at Westchester County Medical Center in Valhalla, N.Y., are seeking class-action status on behalf of other orthopedic surgeons in the state. The surgeons hope to overturn a WellChoice policy and recoup money for unreimbursed procedures...
    • To promote awareness and study among inexperienced anesthesiologists of the relatively rare but deadly condition of malignant hyperthermia (MH), the Malignant Hyperthermia Association of the United States (MHAUS) will issue two monetary awards to anesthesia residents and anesthesiologists who are within five years of completing training. Contact MHAUS at (607) 674-7910 or email "[email protected]")...
    • The effects of SARS are being felt by outpatient facilities in Ontario, Canada. With 147 reported cases, 23 deaths and thousands in quarantine, the province has suspended all outpatient surgical and non-surgical treatments at its 215 hospitals...
    • New data from the American Society of Plastic Surgeons (ASPS) found that the volume of reconstructive plastic surgery procedures jumped 8 percent last year to 6.2 million. The top five procedures were rhinoplasty, breast augmentation, eyelid surgery and facelifts...
    • CRNA salaries jumped 9 percent in 2002, says a healthcare-staffing firm. The average CRNA salary is now $129,000...
    • Worldwide sales of Ethicon's Gynecare Intergel Adhesion Prevention Solution have been suspended pending investigation of reports of pain, repeat operations and three deaths among women who received it during gynecological operations, the FDA says...
    • Ambulatory Surgery Centers: Legal and Regulatory Issues, 2nd Edition by lawyers Scott Becker, Morgan Moran, Melissa Szabad and Mark Kalifa addresses the unique nature of ASCs, emphasizing their physical and organizational separation from other providers.
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