When to Hire an ASC Management Company

When to Hire an ASC Management Company

By Charles T. Neal

Many ASCs have been looking at the same business problems for so long that they find themselves stuck in a rut and unable to implement creative solutions to complex problems. With mounting competitive pressures and declining reimbursements, these ASCs are vulnerable to weakening financial performance.

ASC management companies are able to provide fresh perspective and introduce new ideas that can help. Here are some examples of when it makes sense to enlist the services of a professional ASC manager:

• The ASC is experiencing a negative trend, such as an increase in employee turnover or rise in days in accounts receivable 
• Distributions to investors remain flat or are declining, signaling stagnation or a drop-off in the facility’s operational performance 
• The ASC remains financially healthy, but competitive forces are encroaching upon its market share 
• The ASC is planning for a change, but lacks experience in that area; examples might include a major facility expansion, a substantial change in specialty mix, or the introduction of new services 
• The ASC has sensitive issues to solve, and failure to successfully implement those changes could have very unfavorable consequences. A common example is the need to make changes to the investors’ buyback provisions 
• The ASC needs to make tough operational adjustments to remain financially viable under the new reimbursement from Medicare 

The ASC management field is laden with so-called experts. Always look for an ASC management company that employs seasoned industry professionals and be sure to check references. Also, look for an ASC manager that listens to your needs and offers creative problem-solving strategies. If an ASC management company offers a cookie-cutter approach to your problems, keep looking!

Applying ASC-Specific Management Expertise to Tri-Party Deals 

“I think where we see the most success in hospital/physician ASC joint ventures is in tri-party deals where the hospital has an ownership interest, the physicians have an ownership interest, and an ASC management company has an ownership interest.

It works because a good management company truly does have the expertise and business acumen to manage the operations of the surgery center. Everyone there is bringing value; the hospital may have better relationships with the commercial payors, they also may be used for good compliance planning; the physicians obviously are the ones generating the procedures, but there is a place for a management company at the table as well — to bring expertise in the form of managing the day-to-day operations. ” 
— Joshua M. Kaye, Esq., partner with McDermott Will & Emery LLP