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January 2018

OIG Exclusion – Why Completing Routine Screenings Makes Sense

OIG Exclusion – Why Completing Routine Screenings Makes Sense

By ASC Management, Leadership No Comments

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs on May 8, 2013. This updated guidance is available at

This regulation states that no federal health care program payment may be made for any item or service provided by an excluded person or at the medical direction of an excluded person. Health care entities violating this mandate risk civil monetary penalties of up to $10,000 for each item or service provided by the excluded person. They may also risk an assessment of up to three times the amount claimed, and in serious cases, the health care entity employing or contracting for services with the provider may also face exclusion.

Health care entities, including ASCs, are advised to screen all employees, physicians, allied health professionals, and contractors for exclusion from any federal health care program. The OIG recommends, at a minimum, checking all personnel who provide patient care. Those services are at the greatest risk for civil monetary penalties because they are more likely to be paid for by a federal health care program. The most thorough screening includes services provided to your facility by contract – a pharmacist consultant, sales representatives, administrative and management services, etc.

The OIG does not require monthly screening; however, they strongly encourage completing this task monthly to limit the facility’s liability. Completing monthly screening places your facility in a better position to minimize the potential damages assessed in situations where excluded persons are discovered. Screening should take place when hiring, credentialing, and signing new contracts for services provided to the facility and should continue monthly until termination of employment or contractual arrangement. It also is wise to check state requirements. Many states require or recommend monthly checks of their databases of excluded persons.

You may choose to perform the OIG exclusion review internally via facility personnel or use a third-party vendor. If you use a third-party vendor, keep in mind that it is still the facility’s responsibility to review documentation provided by the vendor. Using a third-party vendor for exclusion verifications does not absolve the facility from liability. Maintain documentation of all searches to verify the process is routinely taking place and serve as a record of the results.

If you discover a prospective or current employee, provider, or contracted person or entity on the exclusion list, you will need to terminate that individual’s employment or contract. You may wish to involve legal representation to assist with the termination and any reporting that needs to be made. If the excluded person provided services to federal health care program patients, payments the facility received from those programs will need to be returned to the federal entities.

Protect your facility from the possibility of civil monetary penalties and fines. Implement a process to complete OIG exclusion checks monthly and maintain records of these reviews on file.

Kelli McMahan, VP of Operations

Developing a Quantitative Skill Set to Become a Better Leader

Developing a Quantitative Skill Set to Become a Better Leader

By Leadership No Comments

The ASC industry is challenged by the same issues as other industries – the need to find, employ, and empower good managers and leaders.

Throughout my career, I have engaged in the search for potential leaders who possess the powerful mix of interpersonal communication skills, a background in clinical medicine and/or its operations, and financial acumen. With heavy competition to hire strong leaders in health care, we are fortunate when we secure candidates who possess two out of these three skills.

For example, many ASC administrators possess the interpersonal skill set and background in clinical medicine, but they lack a solid foundation in finance and mathematics. Oftentimes, we hire or promote these individuals and work closely with them to develop the financial and quantitative skills necessary to successfully manage and lead a surgery center.

A great starting point for health care managers seeking to improve their financial acumen is “Finance and Accounting for Non-Financial Managers.” This resource is offered through many different authors and training organizations. While one-on-one mentoring is preferred, studying the book or attending the course allows those with minimal prior exposure to these principles to achieve a reasonable to high level of competency in financial and quantitative analysis.

Recently, I read an article by Alexandra Samuel in the Wall Street Journal titled “How I Beat Math Phobia – and Became a Better Entrepreneur.”[1] In this article, Ms. Samuel discusses her “math phobia.” It opened my eyes to why many people say they are not “numbers” people. While they may be fully capable of handling numbers-related tasks (calculating a tip, balancing their checkbook), they may have an ingrained fear of complex math or be intimidated by accounting principles.

Ms. Samuels outlines four approaches anyone can take to defeat their “math phobia” and improve their quantitative skill set and financial understanding.

  1. Find a mentor to assist you with increasing your comfort with numbers. (Managers and leaders who are comfortable with math and finances, make yourselves available as a mentor or resource to team members who self-identify as “non-numbers” people.)
  2. Immerse yourself in a “passionate project” requiring numbers, math, or quantitative analysis. In the ASC industry, the project could be related to productivity, reducing waste, improving quality, increasing profitability, or monitoring business development efforts.
  3. Look for a quantitative question you are desperate to answer. Many questions related to an ASC’s performance have a quantitative basis. Ms. Samuels suggests, “All of those questions are answerable with data, and they can drive your recovery from math phobia.”
  4. Determine if your math anxiety is related to the gender factor. As a brother of two sisters, both of whom have science and health care degrees, as well as the father of two daughters who are quite competent in math, I hadn’t considered how gender may impact someone’s view of math and quantitative analysis. After reading Ms. Samuels’ article, I now recognize as a business owner, manager, and leader, I need to be cognizant a gender impact exists for quantitative and math comfort. I also realized that to effectively identify and develop talent, we need to address this issue by encouraging the use of the three tactics outlined above and other available techniques.

Math is important to every role in every organization. When “math phobia” is removed, one may find comfort in the reliability of numbers and equations. Developing a quantitative skill set and financial acumen takes effort, but it begins with support and a nudge in the right direction. No one should shy away from math and finance out of fear. Wise managers and leaders will provide team members with tools to deal with math phobia or they will miss out on the opportunity to secure the services of many talented people.

Robert Carrera, President/CEO


9 Strategies for Upfront ASC Patient Collections

9 Strategies for Upfront ASC Patient Collections

By ASC Management, Revenue Cycle Management No Comments

With the continued rise of co-payments, deductions, and co-insurance percentages, patient balances are quickly becoming the largest payer class for ambulatory surgery centers. This increased financial burden for patients places upfront ASC patient collections front and center for every facility. ASCs who adopt a proactive stance toward patient financial responsibility can significantly shorten their payment resolution cycle and increase profitability.

In an ideal situation – submission of a clean claim and prompt processing of same by the third-party payor – payment from the patient’s insurance company is received approximately 15-30 days following the date of service. Upon completion of a properly processed claim, the facility can then generate a statement notifying the patient of any residual financial responsibility.

In many cases, however, the actual “payment in full” status of an account extends well beyond a 45- to 90-day timeframe, particularly when the balance attributed to patient responsibility is significant.

To avoid becoming a long-term creditor, ASCs can positively impact patient balances by employing the following ASC patient collections strategies in the upcoming year.

  1. Consider hiring a Patient Financial Counselor to serve as your ASC’s primary source of patient estimates. With their solid understanding of how insurance works and ability to relay patient responsibility expectations in understandable terms, your ASC’s upfront patient collections and patient satisfaction will trend in a positive direction.
  2. Pre-verify patient insurance benefits specifically noting deductibles, co-pays, and co-insurance parameters, as well as the portions patients have already met in each of these areas.
  3. Collect co-pays and deductibles on the date of service, prior to patients undergoing scheduled procedures.
  4. Ask for payment in full.
  5. Don’t fall into the trap of extending payment plan terms that will not pay off patient balances owed in a reasonable amount of time (e.g., $10/month on a $500 bill); otherwise, your ASC can easily become your patients’ loan officer of choice.
  6. Establish hard and fast payment plan guidelines. Ensure staff consistently adhere to them when payment plans are required.
  7. Accept credit card payments and offer alternative payment services (i.e., low interest health care loan programs).
  8. Employ the use of a secure online payment portal.
  9. Accelerate your statement process. Gone are the days of monthly statements – it is simply too expensive to carry an interest free loan for your patients. Shorten your statement cycle to daily, weekly, or every 15 days. Ask for payment in full via the initial statement with one final notice generated 30 days later.

Failure to proactively manage patient balances can result in a higher percentage of accounts receivable attributable to individuals than third-party payors and more patient accounts than you can afford to contact. Ensure your patients are informed about their financial responsibility prior to their procedure and actively work with them to secure payment at the time of service. Upfront ASC patient collections can significantly impact your ASC’s cash flow, especially as you move into the new year.

Carol Ciluffo, VP of Revenue Cycle Management

Selecting the Right Compounding Pharmacy for Your ASC

Selecting the Right Compounding Pharmacy for Your ASC

By ASC Governance, ASC Management 2 Comments

In 2011, a compounding pharmacy repackaged an anti-cancer drug off label into plastic syringes for the treatment of macular degeneration. The pharmacy had no container closure or compatibility studies. Fifteen plus patients sustained injuries, including blindness, due to contamination of the medication during the repackaging process.[1]

In 2012, more than 60 patients died from fungal meningitis when they were given a steroid that was compounded by New England Compounding Center. This medication was prepared and packaged in an environment in which proper sterile techniques were not used.[2]

From 2016 to 2017, Guardian Pharmacy Services compounded an ABO steroid to replace a FDA approved drug that had gone on back order. The medication was compounded with an improperly treated binding agent, causing loss of visual acuity in more than 30 patients.[3]

Unfortunately, surgery centers purchased and administered these preparations to patients under their care. Understanding how these adverse events happened will help you prevent them from occurring at your center. Knowing what regulations were put in place as a result and the best ways to research the compounding pharmacies you order from will aid your center in mitigating risk.

How did these issues happen?

Historically, compounding pharmacies were created for physicians to have specialized preparations made for specific patients. Perhaps they had a patient with an allergy to a binding agent or dye in a medication and needed the medication to be made without those ingredients. Over time, these pharmacies began to batch produce sterile preparations. Unfortunately, this occurred in pharmacies that did not have the proper sterile processes and equipment in place to ensure safety of the medications being compounded. In addition, the FDA had no statutory authority over these facilities. The facilities were not even required to be registered with the FDA. While some of these pharmacies may have been visited by their state board of pharmacy, most of them flew under the radar.

After the New England Compounding Center debacle, Congress acted, creating the Drug Quality and Security Act (DQSA). The act delineated two classes of compounding pharmacies and granted the FDA the authority to regulate these facilities.

503A & 503B Key Differences

Under DQSA, there are two classes of compounding pharmacies – 503A and 503B. A traditional compounding pharmacy (one script for one patient) is a 503A. The 503B, however, is an outsourcing facility intended for batch production.[4] The table below outlines the new regulations under DQSA for both types of pharmacies.

503A Compounding Pharmacy 503B Outsourcing Facility
Regulatory Authority State Boards of Pharmacy

FDA registration & inspection

FDA registration & inspection

Additional State requirements

Applicable Standards USP <797>

FDA 503A Policy Guide

FDA cGMP (21CFR 210 & 211)

Additional State requirements

FDA Inspection Under authority to enforce 503A FDA authority to enforce cGMP regulations
Licensing State Boards of Pharmacy FDA Registration
Inspection FDA

State Boards of Pharmacy

FDA & States if additional State requirements
Limitation on Services Individual prescription only

Limited anticipatory compounding

Batch processing

May maintain inventory

Must sell direct to prescriber


Additional Differentiators


  • Laminar flow hood
  • Lack of aseptic technique
  • No qualification of:
    • Active pharmaceutical ingredients (API) & excipient* vendors
    • Container closure
    • Aseptic operators
    • Environmental controls


  • Full current good manufacturing processes (cGMP) qualified[5]
  • API & excipient* vendors
  • Validated sterile procedures
  • Aseptic technique
  • Aseptic operators
  • Environmental controls
  • Environmental monitoring
  • Release assays
  • Stability testing

Best Practices for ASCs

If you need a product and there is no FDA-approved commercial option, it is best to use a cGMP 503B registered outsourcing pharmacy. If a 503B is not available, you can use a 503A facility, but ensure you perform due diligence on both types of facilities first.

There are several ways to obtain information on compounding facilities:

  1. Regulatory status / licensure. Know the regulatory status of the pharmacy you are ordering from by checking the FDA website. All registered compounding pharmacies are listed here with their status and survey history. Ensure you verify licensure in the state where the compounding takes place.[6]
  2. Query results of your (receiving state) State Board of Pharmacy for any regulatory infractions.
  3. Qualify your provider.
    • Use the questionnaire from the International Academy of Compounding Pharmacists (IACP). This document guides you through a series of questions that provide you with a good picture of the facility and their record of regulatory compliance.
    • Obtain and review an information release. Most pharmacies will give this to you if you ask. The information release will summarize regulatory status, licensure type, survey history, etc.
    • Obtain and review the pharmacy’s quality manual. If you really want to dive in, you can review their QA plans.
    • Obtain the cGMP certification of Product-503B outsourcing pharmacies. Often, they will provide a copy of the current good manufacturing processes that were used in production. This verifies the medication was made using the appropriate processes and verification methods.
    • Ask for proof of the facility’s Pharmacy Compounding Accreditation Board (PCAB) certificate.

Armed with this information, your ASC should be able to secure products from a reputable compounding pharmacy who is diligent about preparing medications in a safe environment. You can rest easier knowing you’ve performed the due diligence necessary to mitigate risk to your patients and maintain your ASC’s reputation of high quality care.

Jovanna Grissom, VP of Operations

[1]Avastin injections are reported to cause blindness.

[2] Killer pharmacy: inside a medical mass murder case.

[3] Patients lose vision after routine cataract surgeries at Dallas Key-Whitman center