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Employment of physicians by hospitals. This continues to be an evolving and challenging issue for surgery centers. As surgeons are employed by hospitals, the great majority of physicians may become unable or less able to work with surgery centers or remain owners of surgery centers. A loss of just a few physicians to hospital employment can be devastating to a surgery center. 4. Contracting with payors. This issue goes hand in hand with the out of network issues discussed above. Payors in some markets are making extremely low offers to surgery centers. Here, the surgery center almost has no choice but to deny the contract and attempt to see patients out-ofnetwork. It is often the case that a surgery center or chain can benefit from the help of an experienced managed care contractor negotiator. However, even with help, this remains a challenging issue. 5. Hiring a great administrator. A great administrator must have a clinical and business mind, must be highly focused on results and must be recruiting physicians and cases all the time. Because surgery centers are not a static business, it requires an intelligent, driven administrator to help assure that a surgery center has a chance of great success. The situation where a surgery center relies on the spouse of a surgeon or the office manager of the practice, often leads to a bad situation. 6. Recruiting physicians. Surgery centers must constantly be recruiting new physicians to the center. Here, it is harder than ever to be able to just target specific specialties. Rather, surgery centers must be looking at all available surgeons in the market. There are often not a large number of available surgeons given other ASC investments by surgeons and employment by hospitals. 7. Adding cases. Surgery centers must constantly be working with their existing partners to add cases and examine what types of other procedures can be added to the center. They also must be constantly soliciting nonowners to work at the center. 8. Physicians leaving for other centers. As new centers continue to develop, and certain centers promise large returns, it is critical to keep surgeons from leaving to join another center. This competition for a limited number of surgeons is often a zero sum game. This can also lead to different disputes over non-competes and redemption pricing. 9. Safe harbor issues. There remains tremendous debate over the appropriate use of the safe harbors. Can a center rely on the 1) one-third tests, plus the qualitative tests, to redeem physicians 2) if it does so, it should do so on a consistent basis. Further, even if the center has the right to pay the adverse price, it is often legally advisable to pay the non-adverse price. Further, it should take other actions to assure that it is clear that physicians are being redeemed for compliance reasons not case generation reasons. 10. Statistics and benchmarking; keeping costs in line. Centers and their leadership must be great users of data. They must both receive great data on costs per case and compare costs to averages, and then use that data to cajole, persuade and work with center physicians and staff to bring costs into line with benchmarks. Expenses per case and as a percentage of revenue are impacted by numbers of cases and by reimbursement. That stated, centers really need to concentrate on the actual variable cost per case and the staff hours per case. 11. Redemptions and non competition disputes; without cause redemption clauses. Centers are constantly facing two kinds of disputes. Disputes relating to redemption and disputes relating to noncompetes. Here, many centers have added in a “without cause” termination provision over the last few years simply to help reduce the amount of disputes over redemptions. Here, the physician is typically paid a non-adverse price versus an adverse price. The provisions is arguable not suppose to be used to redeem somebody based on volume or value of referrals. n 11 Key Issues Facing Surgery Centers — 2012 (continued from page 1) REGISTER TODAY 10th Annual Orthopedic, Spine and Pain Management-Driven ASC Conference Featuring keynote speakers Lou Holtz, Sam Donaldson & Tucker Carlson and 134 speakers, including 25 CEOs and 30 physician leaders. See conference brochure inside or visit www.beckersorthopedicandspine.com Becoming the World’s Preeminent sPine comPany. . . January 2003 comPany founded July 2003 1st 510(k) clearance: sustain® ti June 2004 Protex® launched July 2005 xPand® (the gloBus cage) launched June 2006 revere® launched life moves us is a registered trademark of globus medical. through the delivery of Best in class innovation and a focus on advancing Patient care. globus medical is a comprehensive provider of spinal treatment options that focus on the entire continuum of care for today’s back pain patient. returning patients back to their normal daily activities, pain free and as quickly as possible is a priority, because life cannot wait. www.globusmedical.com octoBer 2008 signature® launched January 2009 transcontinental® launched: entered the lateral interBody fusion marKet octoBer 2010 Began us Pilot trial for triumPh®: 1st Posterior disc arthroPlasty Patient in us history feBruary 2011 caliBer® launched feBruary 2012 launched neW division: algea theraPies 22 Spine Todd Albert, MD (Rothman Institute, Philadelphia). 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