For Physicians Only

 

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Q: How do I start an Ambulatory Surgery Center (ASC)?

Designing, building and managing an ASC is an extremely complicated and time-consuming process.  Due to their already hectic schedules, Physicians normally find that they may not have the additional time or specific experience necessary to deal with the hundreds of tasks entailed in the planning and development (or subsequent day-to-day management) of a successful ASC.

For these reasons, we believe that the best way to proceed with an ASC Project is to engage an ASC Development Team.

Q: What is an ASC Development Team?

An ASC Development Team is a group of Professionals who possess specific expertise and experience with ASC development and management.  Team Members typically include:

1. ASC Development and Management Company
2. Licensed Architect
3. Legal Counsel
4. Real Estate Agent and / or Developer
5. Bank(s) and / or Project Financing Organization
6. Equipment Planner
7. Construction Company (General Contractor; Sub-Contractors)
8. Other Professionals if required (e.g., Certificate of Need Consultant)

Q: Why should a Physician consider using an ASC Development Team?

Working for the Physician, an effective ASC Development Team assumes responsibility for all aspects of the Development process.  They handle all tasks large and small and make sure that the ASC is designed and built in a timely and cost-effective fashion.  Most Physicians find that engaging a Development Team is the best use of their time, energy and resources. 

One other critical point: With an ASC Development Team, Physicians remain in control of their significant investment but also have the peace of mind in knowing that their valuable ASC Project is in professional, experienced hands.

Q: How do I begin the ASC Development Team approach?

In most cases, the Team approach usually starts with the Physician selecting an ASC Development and Management Company (DMC).  In other situations, the Physician may already be familiar with the work of an experienced ASC Architect whom they would like to have involved in their Project. 

Under either scenario, the DMC and Architect serve as the “core” Team members with joint responsibility for all aspects of the Project development to include recommending other Team Members for Physician consideration.

Q: What is the basic role of the ASC Development and Management Company?

The Development  and Management Company (DMC) works directly for the Physician.  They become the “Owner’s Representative” with primary responsibility for:

1. Oversight of the Architect and other Team Members
2. Creation of a formal Project Budget and Schedule
3. Coordination of all aspects of the Project
4. Preparation for ultimate ASC opening and operations 

Using parameters established by the Physician, the DMC makes recommendations concerning key Project decisions and keeps the Physician informed at all times about 
the status of the Project.

The DMC works to ensure that the ASC is designed and built based on established Project budget and timetable.  The DMC is also responsible for assuring completion of all operational and organizational tasks necessary for the opening of the ASC.

A final key point:  With a DMC, the Physician has a single point of contact and a single source of accountability.  You know exactly who to call first with any questions or concerns you may have about any aspect of the ASC Project.

Q: How do I know that I have a viable ASC Project?

The initial task for your Development and Management Company (DMC) should be to look at this key issue.  Working primarily with you and your Architect (with support as needed from other Team Members), the DMC should perform a Financial Feasibility / Proforma Analysis for the Project which looks at key items such as:

1. Desired size and scope of the Project / Facility
2. Preliminary schematic design
3. Location / ASC Site options
4. Projected volume by Physician, Specialty and Procedure
5. Projected third party payer mix
6. Projected ASC Project costs
7. Desired timetable for Project
8. Organizational structure
9. Financing alternatives
10. External legal and regulatory requirements

This Analysis should result in a set of 5 Year Proforma Financial and Statistical Statements for the Project.  This will allow you to make the critical “GO / NO GO” decision in an informed fashion before you make the significant investment of time, energy and financial resources in an ASC Project.

Q: What is the basic role of the Architect?

Along with the DMC, the Project Architect is the other key Member of the Development Team.  The initial responsibility of the Architect is to design the ASC in keeping with Physician goals and resources available for the Facility.  

But it goes a lot deeper than that.  An experienced Architect will also address design concerns such as:

1. Assessing the suitability of potential ASC sites/ locations
2. Meeting all local, State and Federal requirements (which are quite detailed and complex) for ASC design and construction; failure to do so up front can result in increased Project costs and delays:
3. Design efficiency and effectiveness for Physician and Employees
4. Patient / Family comfort and convenience
5. Future growth / expansion
6. Allowance for future equipment / systems / technology developments 

Q: What does the Architect do after designing the ASC?

Once your ASC has been designed, the Architect continues to play a major role during the Pre-construction and Construction phases of the Project.  Duties would include:

1. Recommendations as to qualifications and selection of the General Contractor and Sub-Contractors
2. Oversight of all construction activities
3. Processing of all construction-related payments
4. Compliance with all applicable local, State and Federal building regulations
5. Preparation for all construction-related inspections
6. Preparation for final pre-occupancy inspections

Q: What else does an ASC Development and Management Company do?

An experienced Development and Management Company (DMC) assumes responsibility for leading all major development, pre-opening and operational tasks that are critical to the long-term success of your ASC. 

Construction and pre-opening tasks would include:

1. Advice as to the optimal form of ownership and legal / corporate structure for the ASC
2. Creation of all necessary corporate documents (e.g., Charter, Bylaws, Operating Agreement)
3. Compliance with all applicable Federal or State Securities regulations
4. Preparation of documents and sale of ownership interests
5. Securing necessary Project financing and initial Working Capital to include preparation of Request for Proposals (RFP’s) to Lenders, analysis of all Proposals received and recommendation as to the Lender of choice
6. Oversight of Equipment Planner to include final selection and acquisition of all required Furniture, Fixtures and Equipment
7. Selection and acquisition of all required management, accounting, information and safety / security systems for the ASC
8. Selection and acquisition of all required communication systems (e.g., phone, Nurse Call)

Tasks related to preparation for ASC opening would include:

1. Negotiation of optimal reimbursement contracts with managed care organizations and all other third party payers
2. Templates for all required clinical, financial, operational and personnel Policy and Procedure Manuals
3. Human Resources / Personnel matters to include employee policies and procedures, recruitment and hiring process, orientation and training, wage / salary and benefit structure and all other Personnel functions
4. Negotiation of all necessary clinical and support agreements (e.g., Lab, Anesthesia, Biomedical, Housekeeping / Maintenance, Hospital Transfer Agreements, etc.)
5. Purchasing arrangements (such as a Group Purchasing Organization) and acquisition of initial ASC inventory
6. Preparation of initial Capital and Operating Budgets
7. Development of prudent accounting, internal control, and billing / collection mechanisms
8. Securing necessary Insurance (e.g., Professional Liability, General Liability, Property) include preparation of Request for Proposals (RFP’s), analysis of all Proposals received and recommendation as to the Insurers(s) of choice
9. Obtaining all Licenses, Certifications and Permits necessary to open and operate the ASC (e.g., State Licensure, Medicare Certification, DEA, etc.)
10. Decision to seek facility Accreditation with related preparation activities as indicated
11. Establishment of all Quality Assurance, Risk Management, Compliance, HIPAA and related plans

PLEASE NOTE:  Many of the above tasks would be completed by the DMC in conjunction with the Architect, Legal Counsel and / or other Members of the ASC Development Team.

 

Prepared by:

Healthcare Venture Professionals, LLC (615) 457-1848 www.hvpros.com

Cassetty Architecture, PC (615) 822-5711 Extension 304 www.cassettyarchitecture.com

Ask the ASC Specialists

Have a question about ASC’s or about Physician – Hospital collaborative issues? Send your question to HVP and look for the answer under the FAQ's section.