Medicare-certified ASCs are subject to numerous federal laws — including the Anti-Kickback Statute — that require compliance when bringing in or terminating surgeon owners, according to a recent article in the March 2025 issue of Surgery Business magazine.
Here are six strategies to mitigate these risks, according to the article.
Selecting new surgeon owners
ASCs should not base ownership decisions on a surgeon’s referral volume. However, to maintain consistency among owners, centers should avoid bringing in surgeons whose experience and practice volume are significantly different from existing owners. Instead, ownership discussions should begin with surgeons recognized in the community as highly skilled and active practitioners.
Setting a purchase price for incoming investors
New investors must pay the same price as other investors within the same time frame. The purchase price cannot be adjusted based on a surgeon’s expected volume or the perceived value of their patients. However, ASCs can set prices reflecting changes in the center’s overall value over time.
Determining a reasonable share price
Share prices should align with fair market value to prevent any appearance of discounted ownership in exchange for patient referrals. ASCs should obtain a valuation every year or two to establish a fair purchase price for new investors. Valuation principles allow for discounts based on factors such as minority ownership, lack of control, and lack of liquidity due to restrictions on selling shares.
Refraining from lending funds to new owners
The ASC safe harbor provision prohibits the ASC or its owners from lending funds or guaranteeing loans for incoming investors to purchase shares. If a surgeon cannot afford to buy in fully, a “pay-as-you-go” arrangement can be used, allowing investors to acquire units incrementally as they make payments.
Outlining grounds for terminating or buying out owners
Surgeon owners cannot be penalized for failing to bring in a substantial caseload, but compliance with the ASC safe harbor provision requires that one-third of a surgeon’s practice income come from ASC procedures. For multispecialty ASCs, one-third of their total patient procedures must be performed at the ASC.
If a surgeon does not meet these thresholds, redemption of their ownership stake may be appropriate. However, facilities have some discretion, particularly if a surgeon falls slightly short or has extenuating circumstances. Some ASCs include provisions in their governing agreements allowing for buyouts without cause, offering additional flexibility.
Operating or shareholder agreements typically outline buyout terms, often based on past profits, EBITDA multiples, capital accounts, or a fixed amount. The buyout price may vary depending on the reason for termination — full payment for retirement, disability, or death, and a reduced price for breaches, resignations without notice, loss of license, or exclusion from Medicare or other payers.
Awarding ‘bona fide’ and ‘reasonable’ medical directorships
Surgeon owners may be appointed to medical directorships, but these roles must be well-documented and serve legitimate administrative purposes. Compensation should be based on fair market value and supported by valuation reports or industry benchmarks.
To avoid regulatory scrutiny, ASCs should ensure:
- Directorships are for actual, necessary administrative services.
- Physicians maintain and submit regular logs detailing tasks performed and hours worked.
- Compensation aligns with fair market value, supported by valuation reports or survey
The post Antikickback and ASC ownership: The compliance risks to know appeared first on Becker’s ASC.
