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Running a Successful ASC Convalescent Center

Running a Successful ASC Convalescent Center

By ASC Development, ASC Management No Comments

When our ASC opened in late 2014, we had more to celebrate than a new surgery center. We also toasted the opening of our new ASC convalescent center.

Located in the same building, the ASC convalescent center (also referred to as our “recovery center”) allows our surgeons to perform more complex procedures in the ASC that require an overnight stay. These include total knee, hip, and shoulder replacements as well as spine procedures such as anterior cervical fusions and posterior fusions. Upon completion of these procedures in our ASC, we move these patients to the convalescent center. There they recover up to 72 hours under the supervision of at least two medical professionals. A registered nurse, always present, is joined by either a certified nurse aide or medical assistant. Together, they provide personalized care and attention. Meals are served and visitors are welcomed most of the day.

Without the ASC convalescent center, our surgeons would have to perform these procedures in a hospital. Thanks to the recovery center, more patients can take advantage of our high-quality, low-cost surgical care. Our ASC benefits by capturing more surgical volume. In 2017, more than 400 patients stayed in our convalescent center. In the fourth quarter of 2017 alone, more than 130 patients remained in the recovery center overnight.

While the growth is exciting, what’s even more gratifying is the feedback we receive from our recovery center patients. They rave about it on our patient satisfaction survey. One of the questions we ask is: “Would you recommend this facility to friends and family?” Not only will they circle yes, they usually add a comment along the lines of “I would absolutely recommend the Orthopaedic and Spine Center.” That tells me we’re doing something right.

Recommendations for Developing a Convalescent Center

Here are some of the key factors that contribute to ongoing success with an ASC convalescent center.

  1. Careful patient selection. The ability to send patients to the recovery center does not lower our ASC’s standards for patient selection criteria. Patients must be in generally good health. Those with an American Society of Anesthesiologists physical status classification of III or IV are better suited for the hospital. We do not risk patient safety solely to increase volume. Surgeons inform the ASC when they want a patient kept overnight and how long they anticipate the patient staying.
  2. Involved anesthesiologists. Our anesthesiologists are critical to selection and management of convalescent center patients. One of the reasons patients stay is because their procedures are more extensive. This usually brings a greater level of pain following the surgery, which must be managed appropriately. Anesthesiologists are always part of the surgery planning process, ensuring these patients are appropriate for admission and their pain levels addressed throughout their stay. They discuss the different options for anesthesia with patients. They play a vital role in our efforts to use pain pumps to help reduce patient reliance on narcotics.
  3. Appropriate reimbursement. Reimbursement for procedures requiring an overnight stay can be tricky. Not all insurance companies pay for services provided in a convalescent center. When this is the case, the reimbursement for the procedure itself must cover the ASC’s expenses and those associated with the recovery center as well as a reasonable profit margin. By taking the time to conduct a thorough cost-benefit analysis and understanding fully the expenses associated with running the convalescent center, we armed ourselves with data that has assisted with payor contract negotiations.
  4. Focus on compliance. A convalescent center receives regulatory scrutiny just like an ASC. Compliance shortcomings can jeopardize the ability to keep a recovery center open. Make sure you understand and follow state rules for operating an ASC convalescent center. For us, that includes a license, entrance, waiting room, and medical records system separate from the ASC. Although a hallway connects our ASC to our convalescent center, patients are still discharged from the ASC before they are admitted to the recovery center. Following these processes helps keep both facilities in compliance.
  5. Supportive physicians. We are fortunate our physicians embrace the recovery center model. They are able to bring more high acuity cases to the ASC, explaining to patients beforehand the value of staying in our convalescent center. We return the favor by working to provide our physicians and their patients with a great surgical recovery experience. Maintaining the support of our physicians is essential to our growth.

Quick Tips for Getting Started with a Convalescent Center

While it’s great to have the option of providing extended care for patients, running a convalescent center isn’t for every ASC. Here are a few quick tips to follow before you move ahead with opening your own recovery facility:

  • Know your state’s rules. Only some states allow an ASC to operate a convalescent center.
  • If your state has an active ASC association, reach out. They may be able to answer questions about state rules for recovery centers. Lean on your local health department for information as well.
  • Make sure you have commitment from physicians to bring enough overnight cases to justify the convalescent center. Without this commitment, you run the risk of opening a recovery center that will cost your ASC and its owners money rather than help generate revenue.
  • Speak with your payors about your plans. Gauge their willingness to cover the more complex procedures requiring overnight stays at a fair rate.

Opening an ASC convalescent center does not guarantee its success. You will need to encourage your surgeons to schedule these complex cases, when appropriate, at the ASC. Marketing the convalescent center can help attract new physicians. It can also motivate patients to speak with their surgeons about undergoing a procedure at the ASC and staying at the recovery center. When word spreads, you may even attract patients from outside of your market. As we have experienced, the hard work that goes into building and growing a recovery program is truly rewarding.

Jennifer Arellano, Director of Operations

Hiring an ASC Clinical Director

Hiring an ASC Clinical Director

By ASC Development, ASC Management, Leadership No Comments

Recently I took some time to reflect on what I’m grateful for. The long list I came up with included my ASC clinical director.

Our clinical director does a lot for our center. She certainly makes my job as administrator easier. Concerns have never been raised about her work ethic and performance. I wouldn’t think twice about leaving the ASC under her command for an extended period of time. I know that, if an issue arises, she can effectively address it or find the resources to do so. You can’t put a price tag on that peace of mind.

An ASC clinical director is a highly important function within the facility. Finding the right person for this role can be difficult. The clinical director must possess a variety of qualifications related to both clinical and business operations. To find the optimal clinical director for your ASC, I have listed characteristics to hone in on during your search.

Clinical Director Characteristics

Several characteristics clinical directors should possess to help them succeed in their role are outlined below.

Relevant clinical background. The clinical director should have a solid understanding of their center’s specialty(ies). For example, at an endoscopy center such as ours, our clinical director’s gastroenterology background is valuable. If you work in a multi-specialty center, the clinical director should possess a broad surgical and PACU background.

The appropriate clinical background allows the clinical director to:

  • Understand the roles and responsibilities of their staff;
  • Fill in for clinical staff members if someone calls in sick or needs to take a break;
  • Understand how to meet the needs and requirements of physicians in their respective specialties;
  • Earn respect from staff and physicians because of a demonstrated knowledge and experience with the specialty(ies);
  • Support the delivery of high-quality care; and
  • Help the center meet accreditation and regulatory requirements.

Eagerness to learn. ASC clinical directors typically work their way into the position by ascending the ranks of the clinical staff. Clinical directors often do not possess a strong business background as they move into this leadership position. To perform successfully as a clinical director, though, one must understand the business side of running an ASC. This includes budgeting, expense monitoring, and third-party payer contracting and reimbursement.

A clinical director must embrace learning. Your ASC will benefit as your clinical director learns the ASC business and incorporates new knowledge into his or her approach to clinical responsibilities. A clinical director who is motivated to go outside of his or her comfort zone in the learning process contributes to the ASC’s success and is worth his or her weight in gold.

Responsiveness. ASC clinical directors should be responsive to their physicians and staff. They must know how to recognize when issues are developing, such as a dissatisfied physician or poorly performing staff member. They must also know how to deal with these issues in a timely fashion to avoid them becoming more significant problems.

For example, a clinical director should recognize when a physician is becoming busier and adding cases. Such a development touches on many aspects of an ASC’s operations. It may require hiring more staff, allocating more block time, and/or purchasing more supplies. The clinical director is not expected to address these potential developments independently. Rather, they may research the development and speak with other members of the ASC team about actions to effectively accommodate the growth.

Proactiveness. Strong clinical directors can foresee future challenges and know how to act in advance. When a clinical director is new to the position, these challenges may primarily be clinical in nature. The longer the clinical director is in the position, the more he or she should consider business and operational issues as well.

Effective communicator. Clinical directors should be strong communicators, an important ability for effective leaders. They must know how to engage in clear communication with everyone in the center, including physicians, staff, vendors, patients and their families.

Remember, effective communication is a two-way street. A clinical director should feel comfortable approaching others and promote an environment where others feel comfortable approaching the clinical director.

Giving Thanks for My Clinical Director

Our center recently went through an unannounced CMS survey. We were understandably stressed when it occurred, but no one panicked. The staff performed their job duties and provided the high-quality care that they do every day of the year. The physicians expressed complete confidence in the performance of the staff and the leadership of the clinical director. We passed the survey with no deficiencies.

This experience demonstrates how well our clinical director performs. ASCs typically have a small group of physician owners. The physician owners are likely to be critical of the clinical director because it is a clinical role. A successful ASC needs its physician owners to be confident in the clinical director’s leadership and ability to help run the center. If staff members feel the same way, employee turnover rates tend to be low. When staff members like their leaders and work environment, they’re not going to leave.

Patients notice this dynamic. They often comment, “You all seem to like your jobs and have fun here.” That speaks to how the center is managed and how ASC staff members feel about their culture and work environment. Much of this hinges on the presence of a strong clinical director.

Catherine Sayers, Director of Operations

ASC Lifecycle

The Lifecycles of an ASC

By ASC Development, ASC Management, Leadership No Comments

ASCs, like any other entity or organization, have lifecycles. I’ve found each stage in a typical ASC’s lifecycle lasts about ten years, give or take a year. As each stage of the ASC lifecycle draws to a close, a variety of issues generally begin to appear. Each of these issues need to be dealt with to prepare the ASC to enter into and thrive in its next lifecycle stage.

The Physical Plant

Diane Lampron, Director of Operations at Pinnacle III, recently posted a blog about the physical challenges of an aging ASC. The physical challenges include issues that arise with outdated and aging medical equipment, IT equipment and systems, facility design/aesthetics, etc. I won’t rehash the details; however, I encourage you to access her insights

The bottom line? ASC administrators and governing boards need to proactively consider how they will deal with looming physical plant issues, both logistically and financially, before they become insurmountable nightmares.


Most new ASCs located in leased space begin with a ten-year lease with options to renew lease terms at a later date. As the ten-year mark approaches, it behooves the facility’s investors and board of managers to begin considering whether their existing space meets the partnership’s current and expected needs. Much may have changed over the ASC’s initial ten years of operations. An ASC re-examining its space and lease agreement might consider the following –

  • Is the current space too small or too large based on case volume and OR utilization?
  • Is the current geographic location still desirable?
  • Are there physical plant issues?
  • Are the physical plant issues such that moving (rather than repairing or renovating) is a better option?
  • What is the cost of relocation?

Any tenant improvement dollars provided by the landlord should be fully amortized – a fact that should be reflected in a new lease. For facilities located in space owned by the ASC’s members, the question is likely more focused on renovation or expansion. In some cases, the members may consider selling the building.

One size does not fit all. Different scenarios require different solutions. Here are three examples.

In 2016, the governing board of an ASC that was poorly designed, unattractive, and inefficient in its use of leased space, decided to move into a state of the art, investor-owned facility, despite the substantially higher cost. The new location was a new build, custom-designed for the ASC and one of its partnered physician practices. The reasons for the move included physical plant issues at the old site, improved efficiency at the new site, investment opportunities for partnered physicians, and aesthetic factors.

A facility owned by a physician partnership experienced considerable volume growth. In addition, its case mix significantly changed within a short period of time. The partnership anticipated these trends would continue. It elected to pursue a large expansion of its existing location to accommodate the ASC’s changing needs.

Finally, a leased facility used the option of relocating or downsizing its existing space as leverage to dramatically renegotiate its lease renewal.


There are numerous financial situations to consider as an ASC reaches the end of the first stage of its lifecycle. Generally, near the ten-year mark, the center’s original loans will be fully amortized and retired. Consideration now shifts to what to do with the additional cash that typically becomes available. Will extra revenue contribute to additional partnership distributions? Will funds be used to pay for some of the identified physical plant or space issues? Will future plans to address physical plant and space issues incur additional debt for the partners?

As was true with space considerations, a variety of situations can influence finance decisions at the end of an ASC lifecycle. A partnership may elect to take on the financial responsibility of a complete relocation at the time of their debt retirement. Or, the board, proceeding within its rights determined by their operating agreement, may opt to open a line of credit for the facility to handle larger unforeseen expenses so they can add the additional cash flow from the loan retirement to partnership distributions. Their plan may be to use the line of credit as a bridge if a need arises and address any draws on the line of credit with the additional cash flow.

Membership & Recruitment

ASC physician membership is one of the most serious issues a partnership may have to deal as it approaches the end of each lifecycle. At these junctures, many of the partnership’s original members may also be reaching a new stage in their personal lifecycle – considering retirement or moving, for example. The crisis level associated with physician membership is dependent on how successful the partnership has been with recruitment during the previous ten years. The manner in which an ASC and its board of managers deals with potential membership changes is critical to its longevity and its next lifecycle.

The most effective approach to the ASC lifecycle membership challenge is multi-faceted. It begins with continuous recruitment efforts throughout the entirety of the ASC’s business operations. It seeks physician and case volume recruitment targets from a variety of sources, including individual “free-agent” physicians, physician groups, and the introduction of new product lines.

Ideally, the physician retirement process begins with a review of, and familiarity with, the partnership’s operating agreement. Know the retirement requirements related to notice, investment buy out, etc. By staying well informed, the board will be prepared to act as it should. Conduct regular reviews of the ASC’s physician partnership roster. Begin communication with physician partners who may be indirectly mentioning retirement as well as those who appear close to retirement. Determine the impact their retirement will have on your ASC and develop an appropriate succession plan. Will their practice recruit an additional physician to make-up for the retiring physician’s case volumes? Is it possible for you to collaborate in that effort?


ASCs are governed by their operating agreements. And, like ASCs, the partnership’s operating agreement has its own lifecycle. A review of the agreement by the board of managers, the management company, and, in most cases, the ASC’s healthcare attorney is probably in order when a center begins to approach the end of one stage in its lifecycle and the beginning of another.

Questions to consider include: Are the provisions that made sense ten years ago when the ASC was newly launched still applicable now? Can the agreement be modified or re-written to better serve the ASC’s partners over the next ten years?

Examples of operating agreement and governance changes that occur during an ASC’s lifecycle are varied. Some centers adjust their non-compete radius to respond to growth in their community. Some facilities, with the assistance of legal counsel, adjust market value formulas to reflect changes in the market place. Partnerships who originally did not allow for entity physician investment may adopt investment concessions to accommodate the increased prevalence of physician group practices or LLCs. Partnerships may opt to allow management company membership by altering agreements that originally excluded these entities. Some ASCs that once had multiple classes of membership may alter their agreements in favor of greater equity recognizing that physicians have multiple ASC ownership options in their communities. Lastly, board of manager structures may need to change to allow for additional members or appropriate representation.

Be Proactive!

Change in life is inevitable. Change in business is expected. The end of a ten-year stage in an ASC’s lifecycle can signify a make or break moment. ASC lifecycle changes are best dealt with through anticipation and planning. The key to making it is to remain mindful of the many moving parts that require attention. Important areas to monitor include your ASC’s physical plant & space, finances, governance, and physician membership.

Plan ahead! In the ASC industry, it is better to be proactive than reactive. You will thank yourself in the long run if you are able to avoid and mitigate foreseeable issues at your aging ASC.

Robert Carrera, President/CEO

Teamwork Can Become Your ASC’s Organizational Norm

Teamwork Can Become Your ASC’s Organizational Norm

By ASC Management, Leadership No Comments

Is teamwork the norm in your ambulatory surgery center? If the answer is yes, you are ahead of the curve.

Most organizations struggle to develop and foster an environment in which true teamwork can flourish. However, organizations successful in fostering a team-oriented environment see many benefits in the lives, and output, of their workforce. An organizational norm of teamwork fosters creativity & learning, builds trust, develops conflict resolution skills, blends complementary strengths, promotes a wider sense of ownership, and encourages healthy risk-taking.[1]

In the book, High Five! The Magic of Working Together, the authors assert, “Fostering teamwork is creating a work culture that values collaboration. In a teamwork environment, people understand and believe that thinking, planning, decisions, and actions are better when done cooperatively. People recognize, and even assimilate, the belief that ‘none of us is as good as all of us.'”[2]

Why is developing a culture of teamwork such a struggle?

Our schools, family structures, and many of our pastimes emphasize winning and individual achievement over collaborative accomplishments. Some of us are raised in environments that do not teach or value collaboration. Instead, we learn early to be the first and the best.

As we mature and begin our careers, this pattern continues. It is not uncommon for workplace rewards and promotions to be directly tied to individual performance. The system of rewards at work often reinforces self-reliance. Instead of working collaboratively with colleagues who are specialists in their respective fields, we strive to grow our own breadth of knowledge to increase our ability to do all things by ourselves.

How can you create an environment in which teamwork and collaboration are your norm?

Clearly communicate teamwork and collaboration are expected. Model teamwork in your interactions with each member of your ASC. Talk about and identify the value of a teamwork culture in meetings. Make teamwork a core value of your surgery center. Advertise it in places easily seen and identifiable by all. Emphasize that being a team player is a strength. Hire individuals who are team-oriented.

Maintain a culture of teamwork even when things are going wrong. Resist the temptation to blame individuals. Instead, focus on how the team can resolve issues that arise. This allows your team the freedom to make decisions without fear of making a mistake and being reprimanded.

As you transform your staff into a collaborative team, recognize and reward teamwork actions along the way. Consider how to focus compensation, bonuses, and recognition on collaborative practices as well as individual contribution and achievements. One avenue for teamwork recognition is sharing important stories that emphasize teamwork during regular team meetings. For example, “Remember when our Pre-Op/PACU nursing staff worked together to conduct a pre-survey prior to our most recent state accreditation survey? They found 5 areas where we needed to improve processes to maintain compliance with regulations. But they didn’t stop there. They executed the necessary process improvements. Let’s all applaud our Pre-Op/PACU nursing staff members. They diligently worked together to get ready for that survey and contributed favorably to our success.”

How do you maintain teamwork and collaboration?

As you focus on and implement teamwork, you will recognize the need for team building activities. Traditionally, organizations approached team building as a trip to a resort, playing games, or some other type of break from the workplace. Then they wondered why the sense of teamwork at their one-day outing failed to make its way back to the workplace. To gain the most from your efforts to build teamwork, consider more regular, fun, shared occasions for team building. Potlucks, local sporting events, or even local dinners are all good options.

Consider challenging your staff with a project that requires working together collaboratively to achieve a desired objective. Before doing so, however, provide training and tools to team members on communication and setting team standards. This will allow them to focus most of their energy on the assigned project and less effort on figuring out how to work together as a team.

Use ice breakers and teamwork exercises at meetings. While these activities are short in duration and cost little to implement, they help teams get to know one another and often result in a healthy dose of laughter.

Celebrating Team Culture

Ask ASC leaders to publicly recognize teams for their successes and offer team members opportunities to recognize their peers for major contributions to the team. Receiving recognition makes the feeling of team success even sweeter, and worth repeating.

Effective teamwork not only promotes creativity, learning, and innovation, but also encourages team members to perform at their highest potential. When team members are working together at their highest potential, their efforts are multiplied. Your organization benefits exponentially. Once teamwork is established as an organizational norm, trust amongst colleagues and workplace satisfaction are fostered, contributing to a general sense of good will in your ASC.

Jovanna Grissom, VP of Operations


[2] High Five! The Magic of Working Together, by Kenneth V. Blanchard, Sheldon Bowles, Others, 2000, New York: HarperCollins Publishers Inc. Copyright (2001) by Blanchard Family Partnership and Ode to Joy limited.


Matchmaker, Matchmaker: Finding the "Perfect" Surgery Center Team

Matchmaker, Matchmaker: Finding the “Perfect” Surgery Center Team

By ASC Development, ASC Management, Leadership No Comments

In the classic “Fiddler on the Roof” song “Matchmaker, Matchmaker,” Tevye and Golde’s daughters sing about a matchmaker finding husbands for them. The lyrics include the following line: “Matchmaker, matchmaker, look through your book, and make me a perfect match.” When tasked with building a new surgery center team, I play the matchmaker role.

My “book” is comprised of information on job seekers – a collection of resumes/CVs, interview notes, and insight from the candidates’ references. With this information, the pressure is on me to accomplish what those daughters ask for – perfect matches. I cannot simply choose who I think is the best clinical director, administrator, materials coordinator, operating room nurse, recovery nurse, and business office person on paper. These selections cannot happen in a bubble. Instead, I must do my best to ensure this initial set of team members will work well together. They will jointly create the desired culture for the ASC. And they will instill this culture in the staff members hired and trained after them, helping attract more likeminded individuals.

There’s a lot of pressure to get these initial hires right. I hope they will remain with the ASC for years, forming the foundation for the facility. When building a surgery center team, I focus on the following to increase the likelihood that I make the correct selections.

Ownership Expectations

During meetings with the ASC’s owners, I seek first to understand their expectations of the new facility. What does their optimal surgery center team look like? How do they envision the facility’s culture? What type of employees are they looking for to support that culture?

When PINNACLE III is the manager of the facility, I factor in our culture expectations as well. Defining an ASC’s culture isn’t easy. In my experience, if I take the time to understand expectations, I’ll gain the insight required to create the anticipated culture. In an ASC, it will likely include expectations of delivering the highest quality care via a skilled, efficient team who perform their respective roles with integrity.

Surgery Center Team Interviews

A resume or CV tells me about a prospective employee’s background. That background information is important – I want to hire competent, qualified staff. However, resume review is not the most important step in the hiring process. Candidates can appear quite impressive on paper but fall short of expectations in person. The interview process is the best opportunity to assess whether candidates fit the mold for the new surgery center team.

My interview questions aim to accomplish several objectives. I dig deep to truly understand how an interviewee will work for the ASC. My focus isn’t just be on short-term performance but the candidate’s potential longevity and adaptability as the center grows. What are their values? Do they place importance on honesty and integrity? Are they lifelong learners? How do they envision positively impacting the business? I’m looking for positive signs as well as potential warning signs.

I inquire about their previous employer’s culture. Coming from an organization with a different culture than the new ASC isn’t necessarily problematic. Depending upon the situation, it’s important to recognize that I may need to do a little work to address the effects of that culture, particularly if the candidate was not valued in their previous work setting.

I like to ask interviewees how they would act when faced with difficult situations I’ve witnessed firsthand in ASCs. For example, what would they do if they encountered a disruptive physician? What if the narcotic count was off at day’s end? What if a daily deposit didn’t match the books? I want to obtain an understanding of how they are going to respond during stressful events.

These types of questions serve two purposes, First, I hope their responses give me confidence that they will act responsibly. Second, I learn if they will respond differently than I would in a similar situation. If they turn out to be the right fit for the surgery center team, I have identified an area where this person may require some guidance.

My Presentation

When interviewing job candidates, I am typically the first, personal representation of the ASC. I am the face of its culture or, in the case of a new or developing ASC, its desired culture. I am likely all the candidates know of the surgery center team. If I want the ability to hire the candidates I determine are right for the ASC, I need to ensure these candidates view the ASC as a good fit as well.

With the low unemployment rate, health care professionals typically have at least a few, if not many, job options. Hiring is a two-way street. I need to ensure the way I present during the interview process reflects the way I want the ASC to be perceived. I believe it’s best to be clear and concise when interviewing. If I adopt an overly laid-back approach, I risk alienating individuals looking for structure. More laid-back candidates will still appreciate the professional manner through which I conducted their interview.

Achieving Surgery Center Team “Perfection”

While finding “perfect” matches may prove difficult, I want to come as close as possible with my initial hires. I would rather hold off on filling a position than make a “bad” hire. With bad hires, I often spend extra time and effort bringing them on, only to lose them after a short period. In a worst-case scenario, a bad hire can create untoward results in the ASC’s culture – gossiping, not focusing on personalized service, or not treating physicians as customers, for example.

That’s why the key for me is never to hire out of desperation. There’s no better way to find an imperfect match. Remember: When playing matchmaker for an ASC, the task is finding matches for the owners, other staff, and patients. And like that of a matchmaker, this is a responsibility not to be taken lightly.

Lisa Austin, VP of Facility Development

Addressing Patient Requests for Charity Care or Financial Hardship at Your ASC

Addressing Patient Requests for Charity Care or Financial Hardship at Your ASC

By ASC Management, Payor Contracting, Revenue Cycle Management No Comments

As insurance plans continue to shift more of the financial burden of health care to patient, providers receive more requests for charity care or financial assistance. Health care services have become unaffordable for many, forcing some patients to avoid necessary treatment if they do not receive substantial financial discounts.

Does your ASC have a process in place to address the rise in patient co-pays and deductibles, and the growing need for charity care?

One option for dealing with patient payments is to waive co-pays or deductibles to avoid the process altogether. Such a tactic, however, could lead you straight into legal issues related to the False Claims Act, Anti-Kickback Statutes, and non-compliance with managed care agreements. Additionally, there are state specific laws addressing waiver of co-payments and deductibles. The best response is to develop sound financial hardship and charity care policies to help you legally and consistently navigate these waters.

What is the difference between charity care and financial hardship?

There are no formal definitions for charity care or financial hardship. Health care entities use a variety of terms including, but not limited to, uncompensated care, charity assistance, and bad debt. In Pinnacle III’s managed facilities, we have established distinct definitions to minimize confusion and enhance communication.

Charity care is free care. The patient simply has little to no means to pay for needed medical services. The benchmark for receiving charity care is typically set using family income between 100% and 400% of the Federal Poverty Level (FPL). A chart with percentages of the poverty guidelines listing yearly and monthly levels can be found online.[1] The U.S. Department of Health and Human Services releases U.S. Federal Poverty Guidelines which are updated every year using Census Bureau data. The current data can be found online.[2] If you choose to use this method, make sure you update your policy annually when the new guidelines are released.

Work with your Board of Directors to determine what poverty level you will use to grant a charity care service. You may want to consider a sliding scale as listed below; however, charity care is typically “free.”

An example of a sliding scale is:

Below 250% of FPL: 100% charity care
Between 251%-300% FPL: 75% discounted care
Between 301%-400% FPL: 60% discounted care

If you choose to implement a sliding scale, keep your procedure costs in mind. Set your lowest discounted rate at or slightly above Medicare reimbursement which should allow you to break even on the services being provided.

Some ASC’s establish a “Charity Care Day” for a set number of patients who have cleared the Center’s approval process. On this day the providers, staff, and even some vendors donate their time and/or resources for the charity care surgical cases. This practice demonstrates significant commitment to the Center’s community. Share with the local newspapers or launch a public relations effort to alert your community to your initiative to help those in need.

While charity care is “free,” financial hardship is a request for discounted care. Some of the other terms used to describe financial hardship are economic burden, economic hardship, financial burden, financial distress, and financial stress. Being under-insured, having no insurance, and increasing medical costs are situations that contribute to financial hardship. When reviewing a financial hardship request, it is essential to have patients substantiate their financial need. In some cases, patients with insurance who choose not to file their claim with the insurance company, may not be eligible for your financial hardship program. Ensure your board clearly defines your facility’s financial hardship parameters.

Creating a Policy

Both charity care and financial hardship requests should go through an application process. Assign a financial counselor, or someone in your facility who handles financial discussions with patients, to guide them through your process and move completed applications along for consideration and approval.

Consider the following when setting up your financial hardship and charity care policies:

  1. Create an application form for the current episode of care.
    1. Require a new application and proof of hardship for future care.
  2. Be precise about the documentation needed to support the request.
    1. Tax returns
    2. W-2s
    3. Bank statements
    4. Proof of unemployment
    5. Alimony, child support, etc.
    6. All sources of income
  3. Reject incomplete applications.
  4. Consider all financial resources available to the patient.
  5. Provide available options to patients upfront.
    1. Payment plans
    2. Low cost health care loans
  6. Establish timeline for review and approval.
  7. Determine notification process of approval or denial – letter or phone call?
  8. Maintain the confidentiality of the data received with the application. Ensure bank account details, social security numbers, etc. are redacted (or partially redacted) to prevent this information from falling into the wrong hands.
  9. Make the process known to your patients who apply and ensure staff consistently follow it.
    1. Educate your staff on policy guidelines, timeliness of the process, etc.
    2. Consistently apply the process to each individual patient to avoid claims of discrimination.

Once your policies are created, consult your attorney to ensure you have appropriately addressed any risks and you are following state laws.

Unforeseen circumstances arise at the worst times. Having sound policies to review financial hardship and charity care requests will help you compassionately work with your patients while protecting your ASC’s bottom line.

[1] US Department of Health & Human Services; Office of the Assistant Secretary for Planning and Evaluation, Resources, A chart with percentages (e.g. 125 percent) of the guidelines

[2] US Department of Health & Human Services; Office of the Assistant Secretary for Planning and Evaluation, Poverty Guidelines

Carol Ciluffo, VP of Revenue Cycle Management

Running an Effective ASC Board Meeting: Lessons I've Learned

Running an Effective ASC Board Meeting: Lessons I’ve Learned

By ASC Governance, ASC Management, Leadership No Comments

Board meetings are critical to an ASC’s ongoing and long-term success. They designate time to address regulatory issues required to maintain compliance. They serve as an opportunity for leaders to make important financial and strategic planning decisions. An ASC board meeting also allows leadership to address problems or areas in need of improvement.

In my 10-plus years serving as a surgery center administrator, I’ve run my fair share of board meetings. Regardless of how each board meeting turns out, I strive to learn something to help the next meeting go smoother.

Guidance for Conducting a Better ASC Board Meeting

Here are some of the key lessons I’ve learned over the years.

  1. No established rules. There are no firm guidelines for running an ASC board meeting. In fact, board meetings do not need to be formal. What matters is finding a format and approach that allows you to accomplish what’s necessary in the time available.
  2. Get to know your board. Learn about your board members; specifically, what they want to get out of board meetings. Using this information, adapt your approach to cater to these needs.
  3. Be consistent. Once you develop a format that works well for your board meeting, stick with it. This serves several purposes. A template will make developing agendas easier and help ensure you do not omit important topics from one meeting to the next. It will also help focus the meeting – board members will know when certain agenda items are up for discussion. If time is consistently allocated to specific topics, board members are less likely to push for earlier discussion on an issue.
  4. Take command. As the individual running the board meeting, you play a major role in determining the meeting’s effectiveness. Talkative or strongly opinionated board members have the potential to hijack a meeting. Maintain control and keep the meeting on task.
  5. Allow for discussion. Build in time for some discussion of key issues in every board meeting. The key word here is “some.” Most meetings last 60 to 90 minutes. A mere 15-minute discussion will eat up a large percentage of that time. Keep discussions short and focused so you can move through the agenda. If an issue requires lengthy discussion, designate a time following the meeting for interested individuals to continue their conversation.
  6. Focus on key items. Going into an ASC board meeting, know which issues are the most important and make sure to cover them. Good preparation and organization of information will help ensure efficient use of the available time. If you plan to provide details, make sure they are critical to the discussion and any decisions. Do not dive so far into details that you take time away from other key issues.
  7. Keep it high level. When weighing what details to provide, such as financial or quality data, keep in mind that most boards look for a high-level perspective. This would include what’s going right or wrong within the ASC and your recommendation on next steps (more on this below). A high-level perspective typically works well for most topics unless one requires deeper discussion because of its urgency or seriousness.
  8. Come up with solutions. If your agenda includes the sharing of shortfalls or areas of concern, be prepared to outline plans for correction. You want board members to leave the meeting feeling confident that you are already working to address any problems.
  9. Make decisions easier. Agenda items that require board members to vote on an issue or make a decision can quickly derail a meeting. If one board member shares an opinion, others are likely to share their thoughts as well. This can quickly turn into a lengthy, possibly heated, discussion. Avoid this scenario by steering members away from unnecessary confrontations. Rather than asking board members what they think the ASC should do, provide options to choose from. Share your recommendation, with a short explanation of your reasoning. The board may still want to engage in a discussion, but providing a few options rather than presenting an open-ended question should help bring about a faster decision.
  10. Be upfront with bad news. If you have bad news to share or anticipate needing to discuss a difficult subject, don’t shock board members by using the meeting as the first time you present this information. Provide board members with a heads-up that the meeting agenda will include the concerning topic. Make sure the board president is aware of the matter and, when possible, to discuss the issue prior to the meeting. If the matter affects specific board members, hold conversations with them in advance.

Bonus Tips for a Successful ASC Board Meeting

Here are a few additional pieces of advice to help you lead constructive meetings:

  • Efficiency is important, but poor preparation can quickly overshadow its significance. If you don’t present ideas in an organized manner, the board may perceive you as less efficient and knowledgeable.
  • When you don’t know the answer to a question, admit it. You’re better off being transparent than trying to appear knowledgeable about an issue when you simply are not. If the information provided turns out to be incorrect, the board is likely to lose confidence in you. Rather, take the time to research the information and provide a correct response. By taking this approach, when you say you know the answer to a question, board members will trust you.

Considering the infrequency of board meetings – with many ASCs only holding them quarterly – every minute of every meeting is of the utmost importance. To run your next ASC board meeting more effectively and productively, prepare fully and take total advantage of the time allotted.

Diane Lampron, Director of Operations

Why a Strategic Plan is a Good Idea for Your ASC

Why a Strategic Plan is a Good Idea for Your ASC

By ASC Development, ASC Management, Leadership No Comments

A strategic plan is a valuable resource for every business. Ambulatory surgery centers are no exception. A business strategic plan is a tool that outlines the organization’s progress to date, the current market landscape including information on competitors, the strategic priorities for the future, and plans for addressing challenges and opportunities. In each of these assessment areas, the business is viewed from a multi-faceted perspective, focusing on elements such as sales, consumer behavior, finances, quality, and business development. In an ASC, these elements may translate as physician alignment/recruitment, patient satisfaction, finances, quality, and new service lines.

Developing a strategic plan requires an investment of resources. Most notably, the time and commitment of some of the most highly skilled people in your organization. It is important for team members working on the plan to invest the time required to examine the organization and make informed decisions about its focus and direction.

Here are some of the benefits that come with creating a strategic plan for your ASC.

Charting the Course

A strategic plan sets a direction or course for the ASC’s leaders. It allows for the prioritization of growth initiatives and defines how success will be measured. In a sense, it helps people throughout the organization understand what they should be working on and in what order. Without a clearly defined plan, you may find your priority initiatives, the ones that drive the highest success, are being given secondary treatment. For example, if cost containment is a high priority for your ASC, your strategic plan might state you will create awareness of and movement toward achievement of that goal through employee education. Specifying how often employee education will focus on and reinforce cost containment initiatives allows your team to track their progress on the goal throughout the year. The focus shifts from “educating employees” to “cost containment through employee education.”

Maintaining Alignment

A strategic plan can place every member of your ASC on the same page. It is common to find departments within an organization headed in different directions. While they each may be accomplishing their departmental goals, the organization itself may struggle to achieve its primary strategic objectives. With the creation of a strategic plan, it’s possible for operations, finance, clinical, human resources, marketing, business development, and all the other departments in your business to align their efforts towards the same desired goals.

Sustaining Focus

A strategic plan offers an opportunity for ASC leaders to formally incorporate input from key members of the organization into business operations. Business leaders often receive insightful suggestions for improving business processes from internal team members. However, they may find it difficult to incorporate these suggestions in meaningful ways. A strategic plan offers the opportunity to integrate “good ideas” into the organization’s key initiatives and communicate them throughout the organization.

It also assists leaders curb unnecessary projects that consume the valuable time and energy of team members. Sometimes, it can be hard to say no to innovative ideas or initiatives. If there is no clear direction, these suggestions can create a lot of distraction. By prioritizing the activities necessary for success, each member of your leadership team can sustain focus on the agreed-upon objectives. Priorities make it easier to say no to distracting initiatives.

Creating Buy-In

As you create your ASC strategic plan, seek input from all leaders within your organization. Synthesize their input and communicate your message back to every member of your organization. Employees should know where their organization needs to be and the ways it will get there. Ensure your strategy is written down, finalized, and communicated to everyone acting on it.

Create a strategy for your business that incorporates your vision, mission, and outside the box thinking. Treat your strategic plan as a map that charts the course of your ASC, defining where you want your business to go. And, don’t be surprised when your guide helps you end up exactly where you wanted your business to be!

Extra Resources:

Jovanna Grissom, VP of Operations

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