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Preparing for Your AAAHC Deemed Status Survey  

By | ASC Development, ASC Management, Leadership

Why Accreditation?

Undergoing a AAAHC “deemed” status survey, where compliance to both Accreditation Standards and CMS Conditions for Coverage (CfCs) are assessed, is demanding for an ASC. However, there are many reasons why this is beneficial. In general, accreditation may help with consumer confidence, providing a competitive edge for your center in your market. Some states require accreditation in order to maintain licensure, and many insurers and third parties require accreditation as a prerequisite to eligibility for insurance reimbursement and for participation in managed care plans or contract bidding. In addition, being accredited may reduce liability costs.

Deemed status provides these benefits plus it qualifies as a state agency review for Medicare certification for new and existing centers. In most cases, the state will not review an ASC that has been accredited through the Medicare or AAAHC deemed status survey, but it does not preclude the state from conducting validation or complaint inspections.  State licensure inspections are separate from Medicare surveys and are conducted according to state requirements.

Public Notice of AAAHC Deemed Status Survey

Prior to the start of the on-site survey, a packet of information about the upcoming, unannounced site visit is sent to the applicant ASC’s primary contact person.  The packet includes a general outline of the survey event, a listing of documents surveyors may request for review, a copy of the Notice of Accreditation Survey for posting, and other survey information.

It is important that the center post the Notice of Accreditation Survey for at least 30 days prior to AAAHC’s arrival for survey.  If not, the survey will still be conducted, but an accreditation decision cannot be rendered until the Notice has been posted for a period of 30 calendar days.

The Accreditation Process: The AAAHC Deemed Status Survey Team

Although an accreditation survey is, of necessity, evaluative, AAAHC emphasizes the educational and consultative benefits of accreditation. Thus, AAAHC uses health care professionals and administrators who are actively involved in ambulatory health care settings to conduct surveys. 

The Accreditation Process: Surveyor Conduct

Surveyors are representatives of AAAHC. Their priority when conducting surveys is to serve as ambassadors of AAAHC, by being objective fact finders, and educators when appropriate. It is AAAHC policy and practice that surveyors do not participate in surveys of organizations that may be in direct competition with the surveyor’s business interests, or that bear any significant beneficial interest to the surveyor or the surveyor’s immediate family. AAAHC policy also states that, while serving as representatives of AAAHC, surveyors may not solicit personal business or take part in any activities that appear to be in furtherance of their personal, entrepreneurial endeavors.

The Accreditation Process: The On-Site Survey

Each survey is tailored to the type, size, and range of services offered by the ASC seeking accreditation. The length of the on-site visit and the number of surveyors sent by AAAHC are based on a careful review of the information provided in the Application for Survey and supporting documents submitted by the ASC. Questions regarding the scope of a survey should be directed to the AAAHC office prior to the survey.

At the start of the survey, the survey team conducts an orientation conference for the organization. The members of the survey team will introduce themselves, review the survey format, confirm written documentation for which they anticipate a need, and ask the organization to identify the key personnel who will provide the information and access necessary to complete the survey. This is also a time for the organization to ask questions.

The Survey Process: Preparing for Surveyors

ASCs are notified in advance to have specific documents and other information available for surveyors during the on-site visit. This allows surveyors to gather and review information with minimal disruption to the daily activities of the ASC being surveyed. Surveyors may, however, ask to see additional documents or request additional information during the on-site survey.

ASCs are asked to make a work-space available for surveyor use. This private or semi-private area is used to review polices, conduct interviews, and hold survey team meetings to discuss findings.

The Survey Process: The Tour

Survey teams conduct their tours differently; however, most will conduct the tour within one to two hours of being on site. Generally, the tour will closely follow the patient flow throughout the building.

During the tour, the surveyors will be escorted to the areas of observation, including patient check-in. During this time, surveyors will observe posted signs and evidence of quality of care.

Information intake will be next. Limited questions are asked.  Surveyors may ask staff to clarify a process or a policy (i.e., ”How often do you check the refrigerator?” or “What kinds of snacks do you give to patients?”).

Watch for breaches in infection control during the times surveyors are observing staff.  Stethoscopes around the neck, missed opportunities for hand hygiene, multiple bags of IV fluid pre-spiked are some examples of infection control breaches.

Generally, surveyors will look into an operating room through the windows or doors. Remember to be firm on protocol at this point. The clinical surveyor will determine when to observe a procedure. The surveyor may ask for a daily schedule to review to facilitate selection of a case or the surveyor may want to spend time with staff for casual observation.

The surveyors will then be shown recovery, post-op/PACU, and discharge.  At this point, the surveyors will return to the designated survey work-space.

The Survey Process: After the Tour

After the tour is completed, the surveyors will most likely conduct a confidential discussion between themselves before they proceed with the remainder of the survey.  If conducting a Medicare survey, the clinical/administrative surveyor will break off from the life safety surveyor. If you have a maintenance employee or employ a building maintenance company, it is best to have them present to assist in providing information to the surveyors, who may have questions related to facility management and maintenance. The life-safety surveyor is generally at the facility for one day; therefore, all information gathering is performed in a brief period of time.

At the conclusion of the on-site survey, the surveyors hold a formal summation conference where they present their findings to representatives of the organization for discussion and clarification. Surveyors are fact finders for AAAHC; they do not render the final accreditation decision. No information regarding the organization’s compliance with the standards or the accreditation decision is provided during the summation conference. Members of the organization’s governing body, medical staff, and administration are encouraged to take this opportunity to comment on, or rebut, the findings, as well as to express their perceptions of the survey.

After the AAAHC Deemed Status Survey

Accreditation decisions are made by the AAAHC Accreditation Committee following a thorough review of the information gathered during the survey and documented in the surveyor’s report, any other applicable supporting documents, and recommendations of surveyors and staff. All documents reflecting the opinions or deliberations of any AAAHC surveyor, staff member, committee member, or its officers or directors constitute peer review materials and are not disclosed to the organization seeking accreditation and Medicare deemed status, or to any third party.

AAAHC expects substantial compliance with the applicable AAAHC Standards requirements. Accreditation is awarded to ASCs that demonstrate compliance with the AAAHC Standards and adherence to AAAHC accreditation policies.  

Compliance with each requirement is assessed through at least one of the following means:

  • Documented evidence.
  • Answers to detailed questions concerning implementation.
  • On-site observations and interviews by surveyors.

The ASC will receive a written, comprehensive copy of the findings after the on-site survey.

AAAHC works with a third-party calling center (customer satisfaction Survey Company) to conduct an evaluation of our survey process and our surveyors.  A representative from the calling center will phone the organization’s designated primary contact approximately one week after the survey to discuss the recent survey experience.  Obtaining this input by telephone provides the surveyed organization and AAAHC with a streamlined, efficient means of providing and receiving feedback about the survey process.  An organization’s feedback has no bearing on the accreditation decision. 

Approximately ten business days after the last day of survey, the ASC will receive a formal request and instructions for completing the required Plan of Correction if deficiencies have been cited. AAAHC will provide the ASC with directions and a timeline for submission for the required Plan of Correction.

The letter of accreditation is typically received approximately 30 days after the completion of the survey.


source: Accreditation Association for Ambulatory Health Care, 2019, www.aaahc.org.

additional resource: Preparing for an ASC Accreditation Survey, 2018, www.pinnacleiii.com/preparing-for-an-asc-accreditation-survey.

Jovanna Grissom, Regional Vice President of Operations

Curbing Healthcare Spending: What Health Plans Are Doing to Work Against Out-Of-Network Providers

Curbing Healthcare Spending: What Health Plans Are Doing to Work Against Out-Of-Network Providers

By | ASC Development, ASC Management, Payor Contracting | No Comments

As healthcare spending in the United States continues to rise at a seemingly unstoppable pace, healthcare entities are making attempts to curb healthcare spending. This has led to changes in the healthcare marketplace and delivery of care to consumers. For example, health insurers are attempting to rein-in spending by decreasing the use of out-of-network providers. Recently, when asked what health insurers are doing to make it more difficult for out-of-network providers to secure patients and collect payment, I responded with “A variety of things depending on what the health plan is trying to prevent.”

While health plans are using a variety of measures to thwart out-of-network activity, this blog will focus on three prevention techniques that have perhaps become more prevalent recently:

  1. Educating members on the costs of using an out-of-network provider,
  2. Imposing penalties on in-network providers for use and/or referral to out-of-network providers.
  3. Making it difficult for out-of-network providers to collect payment.

Educating Members on the Costs of Using an Out-of-Network Provider

Health plans offering their members out-of-network benefits/coverage are going to greater lengths to steer their members away from out-of-network providers and to in-network providers through education.

As a first line of defense, health plans are taking steps to re-direct members to in-network providers via posts on their website and/or calls from pre-authorization staff, where the member is being educated on the increased cost associated with care rendered by the out-of-network provider. Some health plans provide an online hypothetical cost comparison tool. The tool helps members better understand the cost differences among doctors, facilities, and laboratories that do not participate in their networks.

Some health plans inform their members the out-of-network provider has no limit on what they can charge for their services, and those provider’s fees will not be discounted because they do not participate in the health plan’s provider network. Additionally, insurers may inform their members when an out-of-network provider is used, that they will likely end up paying a higher deductible and co-insurance.

Finally, health plans are alerting their members if they use an out-of-network provider, only a portion of the out-of-network charges will get paid by insurance and, absent a state-specific law or regulation, the member will be responsible for paying the remainder of the charges.

Penalizing In-Network Providers for Use of Out-of-Network Providers

When an in-network provider such as a surgical facility or surgeon uses the services of another provider who is not contracted with and participating in the plan’s network, the in-network provider may now be putting itself at risk for repercussions from the health plan.

Contracts between health plans and providers may require contracted providers to restrict their use of or referral to other contracted providers within the network. When these contracts are breached, consequences may arise including being served a contract termination notice or experiencing financial penalties. These types of restrictions have recently been extended to anesthesiologists, radiologists, pathologists, and surgical assistants.

These out-of-network referral situations have garnered significant attention because they can create unexpected “surprise bills” and substantial financial burdens for patients. As a result, health plans have started terminating contracts with in-network surgeons that use out-of-network surgical assistants and/or out-of-network facilities.

Some health plans are requiring new facilities seeking in-network status to accept contract provisions that allow the health plans to impose financial penalties on the facility for the use of out-of-network anesthesia, radiology, lab, and pathology providers. Penalties have ranged from a small amount to over half of the negotiated surgical fees. In addition, health plans have begun pressing providers to hold harmless provisions that protect both the payer and member from the added costs of out-of-network providers, including limits or prohibitions on balance billing.

Not Making It Easy to Collect Payment

Rather than reimbursing the out-of-network provider for services rendered, some health plans issue payment directly to the patient. This may occur even if the out-of-network provider has had the patient sign an assignment of benefits form, whereby the patient requests his or her health plan issue payment directly to the provider. And once the payment they’ve been waiting for has been sent directly to the patient, it may become more difficult for the out-of-network provider to collect payment. If patients have cashed and already spent the insurance reimbursement check, it may be difficult for the out-of-network provider to secure remuneration.

The practice of sending the payment to the patient will continue to be a deterrent to out-of-network providers. While a handful of states have enacted legislation which requires insurers to honor the assignment of benefits, chasing patients for payment will likely remain a labor-intensive administrative burden associated with managing out-of-network claims well into the future.

Making an Informed Decision on Going Out-of-Network

For some providers, the out-of-network strategy may appear to be the best fit for their business. But, facilities and physicians who either currently accept patients on an out-of-network basis or are contemplating doing so should also be aware of the potential obstacles and limitations of this strategy. Obstacles for out-of-network providers include persuasive education for plan members on the financial consequences of securing care from an out-of-network provider, the possibility of having penalties imposed on in-network providers, and the risk of chasing patient payments. If surgery centers do not understand the impact this will have on their business in the long-run, the vitality and long-term success of the center could suffer. It is in each practice’s best interest to understand the pros and cons of being an out-of-network provider prior to making an informed decision for the organization.


Dan Connolly, VP, Payer Relations & Contracting

ASC Marketing and Sales: Keeping Up in an Evolving Industry

ASC Marketing and Sales: Keeping Up in an Evolving Industry

By | ASC Development, ASC Management, Leadership | No Comments

Marketing your business isn’t easy. Having a comprehensive marketing strategy is especially important in dynamic markets where change is the norm. In health care, and especially in the ASC industry, effective leaders tend to focus on concrete operational and administrative items that keep the doors open for business. Surgery centers often operate with a precise number of staff designed to support the current client base. An all hands-on deck culture leaves limited time to consider, let alone implement, a robust ASC marketing and sales strategy. Some stakeholders may argue a robust ASC marketing and sales strategy is not vital – after all, physician practices drive business to the site of care. While this is true, environments change. Those who are committed to tactics that have worked well in the past may soon find they have been left behind.

What is an effective way to go about marketing an ASC? Here are some strategies to consider.

Selling – Manipulation v. Persuasion

It is said, “Any successful business sells well.” What does that mean exactly and how does it apply to surgery centers?

As an administrator in a health care entity, it may be difficult to imagine yourself selling as one does, let’s say, in a retail store. When we think of health care in a typical clinical environment, we picture sick patients, caring providers, medical equipment, medicines, and other related items. It can be difficult to imagine selling in the health care arena. In fact, it almost feels wrong – perhaps because most health care isn’t elective. However, I would venture to say this is true only if you consider the old school perception of selling. What do I mean? The old mindset of selling embodies characteristics of manipulation which, by definition, entails, “artful, unfair, or insidious means.” There is a much stronger ethical consideration in health care than in many other industries. Artful, unfair, and insidious means go against the ethics of medical practice.

Shifts towards globalization and mainstream use of technology have allowed for greater sharing of consumer insights. Consumers in turn have become more savvy. Selling now focuses more on persuasion. Persuasion means to move by “argument, entreaty, or expostulation to a belief, position or course of action.” Selling deals with intent, purpose, and an end goal. If the end goal is to rip people off, then, yes, selling feels terrible. That is manipulation. However, health care leaders can expect to feel something different when their selling mindset moves toward persuasion.

The Norwegian word for sell is “selje,” which directly translates to, “to serve.” As a business operator, if you believe you are there to serve the marketplace, customers will find ways to buy your services because you are serving them. With this shift in perspective, selling becomes more palatable for our surgery centers, right?

Understand Your Customer

The best way to attract customers – new patients or physicians – is to understand your prospects. Health care providers ask leading questions to understand the root cause of a health problem. The same practice holds true with your customers.

Let’s say you want to recruit a spine surgeon who just moved into your market. What are your next steps?

How about a visit to the surgeon’s practice, bringing his or her favorite lunch and dessert, to entice the surgeon to stick around while you rave about how great your surgery center is for his/her cases? This represents the old way of selling. And many physician recruiters would feel good about this method because you walked in with intent, purpose, and an end goal. But you would be doing yourself, the physician, and the surgery center a huge disservice if you didn’t take the time to understand the real needs of the physician. The favorite lunch and dessert will only satisfy for a short while. The positive statements in favor of the surgery center will only maintain impact until the physician experiences a negative event that doesn’t measure up to these claims. Even though this sales approach may provide immediate success, it is wiser to invest more effort in understanding the physician’s needs.

Taking time to get to know the physician and asking the right questions will create and sustain a longer-term relationship with them, which should be the real end goal. Another reason to ask the right questions is to assist customers articulate their needs. Your exercise may help get them to a place where they feel better about taking a step forward with you. Conversely, you may encounter a physician who has his or her defenses up because they have run into someone who sold, manipulated, and ripped them off in the past.

How can you engage physician recruitment prospects in deeper conversations about their needs? Here are some examples of focused questions to get you started in better understanding your customer.

  1. “I understand you just moved into the area. Where would you like to see your practice go in the next 3-5-years?” or “What are your goals for you and your practice in the next 3-5 years?”
  2. “What are your current patient demographics? Are there any additional cases or services you would like to start performing?”
  3. “Are there any special equipment needs for your surgical cases?”
  4. “Have you worked in an ASC before?” If yes, “What are some of the best or worst things that have shaped your ASC experiences? What things do you wish you could have changed? What things have you enjoyed?”

To accurately gauge if you are asking the right questions, determine if you are simply selling to your customer or truly servicing them. Servicing your customer entails understanding their needs first, rather than presenting to them what you think they want.

When you ask better questions of your customer, you get better responses about pain points and aspects your customer expects from your service. These answers can help you pinpoint how your ASC stands out from competitors. Sometimes your ASC is a better site of care for a physician; sometimes it’s not. Not being able to serve every client’s needs is okay. Develop your strategy, then focus on servicing your clients if it makes sense for you, your staff, and the business. Avoid being stagnant. Communication about your customers’ needs allows you to uncover hidden opportunities for business growth which can yield untapped profit.

Understand Customers’ Preferred Channels of Communication

Once you obtain the answers you need from your customers, work to understand how your customers want to receive future information and communication. Do they prefer phone calls, texts, emails, or paper communication? Do preferences change depending on the content? Identify when it is appropriate to send out a mass form of communication to all clients and when to communicate with clients on an individual basis. When you communicate with clients one-on-one, tailor your messaging and communication channel to fit their communication preferences. The best way to find out is to ask!

Making Every Sale Count

The last tip in marketing your surgery center is to make every sale count. Air Force veteran and “sales whisperer” Wes Schaeffer claims, “To make any sale, you must make every sale.” He goes on to explain: “Suppose you are going on a date. You would brush your teeth, dress up nice, approach with a smile, and perhaps pay for dinner. All these little gestures are viewed as little sales along the way, contributing to a larger sale.”

The same holds true for your surgery center. Some of the little sales to consider as part of your larger ASC marketing and sales strategy are:

  1. Is your pre-registration pamphlet easy for patients to read and understand?
  2. Can patients easily navigate your website? Is your website enticing to patients? Do they get a good feel for the care they will receive at your facility?
  3. Do patients receive any form of communication prior to their procedure to ensure they are ready?
  4. Do front desk personnel warmly greet patients and/or friends and family when they arrive?
  5. Do your nurses and providers explain all necessary steps and set up expectations throughout each patient’s episode of care?

This is just an example of some of the mini-sales opportunities that occur when providing service to patients. There are many more touch-points in the patient journey. Each of these touch-points allow an opportunity to complete a mini-sale.

What works for your surgery center today, may not work for your surgery center tomorrow. Opportunities to improve customer experience occur with technology updates and patron preferences. The customer experience should be monitored, updated, and modified over time. The best way to identify the quality of your customers’ experiences is through patient satisfaction surveys and online reviews. Identifying how your customers navigate through your supply chain, including all the mini-sales touch-points, lends itself to better customer experiences and opportunities to retain customers long-term.

Effective ASC Marketing and Sales Drives Business

ASC marketing and sales requires an unceasing commitment. Customer needs are your number one priority in providing services, whether that customer is a physician or patient. Ensure you prominently address those needs in your strategic plan.

Effective ASC marketing and sales expresses your story. Never forget, your sales pitch should reveal your passion – to provide the highest quality service to consumers. As every consumer and every industry is different, so too is every business and every sales pitch. When you embrace the unique direction your customer base is encouraging you to move in, customer loyalty and unique service offerings will drive your business growth.


Trista Sandoval, VP of Business Development & Physician Relations

Opening a New Surgery Center: A Roadmap for Success

Opening a New Surgery Center: A Roadmap for Success

By | ASC Development, ASC Management | No Comments

If you’re planning on opening a new surgery center, congratulations! If all goes well, you will soon provide your community with a high-quality, low-cost option for surgical care. But there’s a lot of work to do before you reach that exciting grand opening. It is said that “Rome wasn’t built in a day,” and neither is a successful ASC.

Before you proceed with plans to open a new surgery center, consider the following list of questions. Knowing the answers will help ensure the facility you picture today is what you end up presenting to your community tomorrow.

New Surgery Center Questions to Answer

Are your partners committed?

A new surgery center is destined to fail if you do not have committed partners. That commitment needs to be short and long-term. Commitment can be gauged in several ways – their financial investment, their case volume, and their participation in research and decision-making.

Once partner commitments are confirmed, you will need a well-structured operating agreement. This agreement should account for potential issues that may arise during the ASC’s development and as the business matures. Getting a group of physicians to verbally agree to partner on a project is one thing. It’s another to obtain their signatures on paper and make their vision reality.

Where will financing come from?

Building a new ASC isn’t an inexpensive undertaking. Expenses that will need to be covered before performing the first procedure include:

  • Construction, either of a new facility or remodeling an existing space
  • Medical equipment and supplies
  • Service providers (more on these in the next section)
  • Computers and software
  • Furniture and fixtures
  • Signage
  • Licenses
  • Staff salaries and benefits

You will also require working capital to cover expenses as you wait for reimbursement for procedures. Before you break ground, know how you will pay for all these expenses – and some unforeseen ones as well. You’ll probably need a mix of debt financing and cash capital contributions from the owners.

Who is on your team?

You’re going to need a lot of help to bring your plan for a new surgery center to fruition. Carefully consider the selection of individuals and teams with whom you contract to fill project needs. These service providers may include:

  • Architect
  • Management firm
  • Engineer
  • Attorney
  • Managed care contract negotiator
  • Recruiter
  • Marketer
  • Website developer

A poor choice of one or more of these service providers may result in serious ramifications. These could include project delays, failed surveys and inspections, poor contracts, and over-staffing.

What is your desired location?

This can be an easy or challenging question to answer, depending upon your circumstances. Do all the new surgery center’s owners practice out of the same building? If so, it may make sense to explore developing the ASC in, or attached to, that building. If that’s not an option, or you’re bringing together owners from multiple practices, you will need to decide whether to build a new facility or move into a remodeled space.

Both options have their pros and cons; weigh them carefully. Do you desire full control over construction of the building and its floor plan? Are you prepared to cover the additional costs (e.g., permits, foundation, connecting water, sewer, and electricity) associated with constructing a building from scratch? Is there an existing space you could remodel and open faster than building a ground-up facility? Will the potential savings of remodeling eventually be offset by building repairs and upgrades? While it may seem counter-intuitive, the cost of remodeling an existing space can surpass that of new construction.

What do you envision for the ASC?

The building of a new surgery center can take many months up to a few years. That’s why planning should consider not only physicians’ current case mix but their future volume projections.

For example, if your ASC will perform orthopedic procedures, are total joints on the horizon? If so, you will need larger operating rooms and additional storage space. If your physicians plan to eventually perform higher acuity cases, will you have the means to accommodate overnight stays (state permitting)? If you anticipate expanding to accommodate future growth, does the location you’re eyeing provide that option?

In the excitement of planning your ASC for today, don’t overlook the potential needs of your ASC for tomorrow. Be careful not to overbuild “just in case.” There’s a fine balance between building for what you need when you open and what you will need to grow.

New Surgery Center Pitfalls to Avoid

We’ve already touched on some of the issues to watch for when planning a new surgery center. Here are a few other pitfalls to avoid:

Don’t make rash decisions. It’s natural to want to break ground as soon as possible to move the project toward completion. But racing to build your new ASC could result in failure to provide appropriate attention to important matters. It’s better for a project to take longer if it means taking time to make educated decisions.

Don’t neglect project management. Building an ASC requires oversight and coordination of numerous moving parts. This adds up to a lot of time and energy. You and your partners may desire significant involvement in managing your new surgery center project. However, juggling it and a busy practice will likely prove quite difficult. Securing adequate, knowledgeable project support will help ensure nothing is overlooked or rushed.

Don’t underestimate the paperwork. You’re going to need to provide documentation to many organizations throughout the development of your ASC. This includes your state’s department of health, the Centers for Medicare and Medicaid Services, and an accreditation organization. The paperwork can be cumbersome and complex, and you will need to appropriately time its submission to keep your project on track.

Don’t wait to begin staff recruitment. Competition for suitable surgery center employees is high across the country. Recruiting and onboarding the staff needed for the first day your ASC is open will take time. Poor management in this area could leave you shorthanded, potentially forcing you to delay opening or slowing case migration.

Final Key Takeaway

One closing thought. I cannot overstate the importance of involving the right people in the building of your new surgery center. Individuals and organizations who are knowledgeable about what makes ASCs successful can help keep your project on schedule and on budget. Choose wisely!


Jebby Mathew, Regional Director of Operations

Securing Payer Contracts for Your De Novo ASC – It’s About Time!

Securing Payer Contracts for Your De Novo ASC – It’s About Time!

By | ASC Development, Payor Contracting | No Comments

Does anything matter more to your de novo ASC’s long term operational success than reimbursement rates and volume? Yes! While both reimbursement and volume are important, buying yourself the time required to secure credentialing, carefully negotiate reimbursement rates, and execute contracts with your key commercial payers is integral to your new facility’s success. They say, “Time is money.” In this scenario, that translates into securing adequate capital to cover operating costs while you accomplish crucial contracting tasks on behalf of your ASC.

Assessing Your Needs

Consider the following when assessing the cash reserves, line of credit, and time your de novo ASC will need during the payer contracting ramp-up stage of your development project.

Payer Credentialing

Credentialing for the newly developed ASC will take time. Credentialing requirements vary by payer. Some payers may require your new facility to receive approval from Medicare of its enrollment application prior to accepting your ASC’s credentialing application. To complete Medicare’s enrollment application, your ASC must perform several “test” cases. The current requirement is 10 cases. These cases will involve coverage from insurers other than Medicare. It not only takes time to perform these cases, it also takes time to select them from your surgeons’ patient pool of cash pay, workers’ compensation, auto, or charity cases that are readily available for surgical care shortly after your ASC opens. Completing this portion of the process can take several days to several weeks.

Some payers may require your ASC to be certified by Medicare and/or accredited by one of the CMS-approved accreditation organizations prior to completing credentialing. Once your new ASC’s Medicare enrollment application is approved, your facility will be placed on Medicare’s unannounced survey calendar. This means a surveyor may show-up anytime in a 90-day window for the on-site certification survey. Then, once the certification survey is finished, it may take several more weeks for the parties to exchange and/or process documentation before Medicare issues your certification letter. The certification letter provides your ASC with its Medicare number and Provider Transaction Access Number (PTAN). This portion of the process can take several months and must be accounted for in your project timeline.

Finally, once your ASC meets all the credentialing documentation requirements mandated by payers, it may take several more weeks for their credentialing committees to review and approve your credentialing application. Even if all goes well with credentialing, contracts cannot be executed before reimbursement is negotiated and each payer loads each agreement into its claims processing system.

Reimbursement Negotiations

Negotiating reimbursement rates take time. It will take time to obtain optimal reimbursement – or rates that are close to what you need – because payers often attempt to pay new ASCs lower than existing ASCs. This may be because payers view new ASCs as low hanging fruit on the cost-savings tree. Payers see an opportunity to save money by proposing lower reimbursement which, unfortunately, is quickly accepted by some new cash hungry ASCs.

From a short-term perspective, it may appear to make sense for a new ASC to accept the proposed low rates to secure payer contracts which then allows them to quickly start seeing commercial patients. However, in the grand scheme of things, the ASC is not solving a problem – it’s just delaying a problem. Such a situation gives rise to artificially setting market rates which takes additional time and effort to resolve during subsequent renegotiations.

It takes time and effort to secure reasonable reimbursement. It may take your new ASC a few to several months to negotiate agreeable reimbursement and contract terms with all its major payers. While some negotiation efforts can begin before the facility opens, most payers will not take new ASCs seriously until they open their doors. Maybe that’s because, until your doors are open, an opportunity cost to the payer and its members does not exist.

Executing Contracts

Waiting for payers to load the contracts you negotiate takes time. It generally takes 30-45 days, depending on the payer and the time of year, but occasionally it can take well over two-months. Oftentimes, the only thing your ASC can do during this stage is hurry up and wait. Therefore, the time spent in this portion of the process must be accounted for as well.

Gathering Resources

Having access to adequate capital to meet your ASC’s operating costs for 6-12 months after you open may be necessary to buy the time you need to secure your payer contracts. This is an important consideration when selecting a lender and applying for a line of credit for your de novo ASC.

No one can say exactly how long it will take. However, you should be financially prepared to spend a significant amount of time in the payer contracting ramp-up period. There is no way to get around this often-lengthy time investment, but laying the proper reimbursement foundation is a key component of your de novo ASC’s long-term success.


Dan Connolly, VP of Payer Relations & Contracting

Preparing for an ASC Accreditation Survey

Preparing for an ASC Accreditation Survey

By | ASC Development, ASC Management | No Comments

They walk in the door without an appointment. Staff immediately know they are not patients or family members. Within minutes, word has spread throughout your facility – your center is about to undergo an ASC accreditation survey.

Surveys are a fact of life in the ASC industry. Whether they are performed by surveyors from the Centers for Medicare and Medicaid Services (CMS), your state’s department of health, or an accreditation organization, doing well on surveys is critical to your ASC’s success. Poor survey performance can jeopardize your licensure, Medicare certification, and/or accreditation. Lose any of these and you are looking at a loss of insurance contracts and patients.

More importantly, poor survey results may indicate shortcomings that have the potential to jeopardize patient and staff safety. ASC accreditation survey requirements, while they may feel cumbersome, are designed to help support the delivery of safe, high-quality care. By meeting them, you demonstrate a commitment to the wellbeing of everyone served by your ASC.

While your ASC should always strive to meet requirements (more on this later), survey preparation is a worthwhile exercise. Preparation can help shore up deficiencies and ultimately improve survey performance – a win-win combination.

ASC Accreditation Survey Areas of Focus

Here are some areas to focus on prior to an ASC accreditation survey to help improve your likelihood of success.

Policies and procedures. Carefully review your ASC’s policies and procedures. Make sure staff are adhering to them as written. If any policies are outdated, update them. If you have added new policies and/or procedures but lack written documentation, create it.

Physician credentialing. Ensure your physicians are credentialed and their files include all required – and current – documentation. Each physician has numerous documents with expiration dates that differ from physician to physician and document to document. Without careful monitoring, it’s likely one or more of these documents will expire. Expect a surveyor will catch any such lapse.

Personnel records. Keep employee files current and complete. Documents in these files should include job description, competency assessments, training records, performance evaluations and I-9s (used to verify identity and employment authorization).

Decontamination area. Surveyors are paying greater attention to compliance with rules governing sterile processing areas. Under scrutiny is cleaning, disinfection and sterilization of scopes, and separation of clean and sterile processes. Make sure staff follow your policies and procedures and can explain how they adhere to guidelines and manufacturers’ instructions.

Infection prevention. While infection prevention has always been an area of focus for surveyors, it’s receiving even more attention these days. Work with your infection preventionist to ensure staff understand and are following proper processes. For example, if your procedure manual indicates “bonnets over the ears,” then make sure everyone has bonnets over their ears.

Emergency preparedness. Another area likely to face increased surveyor scrutiny during your ASC accreditation survey is emergency preparedness. This issue is in the spotlight thanks, in part, to the CMS Emergency Preparedness requirements that took effect in November 2016. Ensure your ASC has performed its required fire and other emergency/disaster drills and completed the appropriate accompanying documentation.

The basics. Regularly walk around your ASC and look for anything that seems out of place or could jeopardize compliance. Perhaps there’s a cart in the hallway when it should be in a closet. Maybe someone borrowed a policy and procedure binder and did not put it back. Identifying who made the mistake and using the experience as a teaching opportunity helps prevent recurrence of errors.

Perform a visual inspection of your restricted areas, checking for cleanliness. Conduct a “white glove test” on doors, screens, and operating room lights.

Staff preparation. Surveyors will inevitably ask your staff questions during their visit. Prepare your staff for this experience. Ask them questions you think a surveyor might ask. These questions can cover topics such as job responsibilities, policies and procedures, location of equipment, and emergency response.

While staff should be able to answer many such questions, they may not know all the answers. And that’s okay. Rather than make up a response that may be incorrect, instruct staff that it’s acceptable to say they do not know an answer but know where they can find it.

Maintain an ASC Accreditation Survey Mentality

Surveys tend to be infrequent events. This is no excuse for allowing compliance to falter in between surveys. Your staff should approach every day as if an ASC survey may take place.

Here are some quick tips to achieve this mentality:

  • Quiz staff. Keep staff on their toes by asking them surveyor-type questions. If someone doesn’t know an answer, you may have identified an area for additional education and/or training.
  • Conduct mock surveys. Periodically conduct mock ASC accreditation surveys. A member of your leadership team can fill the role of a surveyor, walking around the ASC and assessing performance. You can also bring in an outside, trained consultant to simulate the survey experience and identify compliance gaps.
  • Engage staff. Encourage staff to speak up when they identify potential compliance concerns. Treat these moments as learning opportunities rather than punitive incidents.
  • Don’t wait to educate. If you change a process, educate staff on the revision as soon as possible. Remember to update affected policies and procedures as well.

Working to keep compliance on the front of staff’s minds can help your ASC better meet requirements and ensure a consistently high level of care.


Kirk Lagonegro, Director of Operations

Choosing the Right Lender for Your De Novo ASC

Choosing the Right Lender for Your De Novo ASC

By | ASC Development | No Comments

Banking relationships are crucial to any successful business venture. Choosing the right lending partner for your de novo ASC development project is integral to the longevity of your financial asset. There will be times when you need an ally to watch your back financially. A lender who knows your business and is willing to be your partner throughout the process is essential. So, how do you select the right lender?

Submitting an RFP

During the feasibility phase of development after you have run your financial pro forma, send out a request for proposal (RFP) to at least three banking entities. Ensure you include one financial institution from the local market where the de novo ASC will be established. Banks in the local market are often more attuned to market conditions and may be willing to extend better rates or lower fees to win your business. Decide early on what type of services and resources you will need. Send your RFP to banking entities you’ve identified as strong providers of these services and resources. Make sure you give yourself enough lead time – at least 90 days – before needing any funds for the project.

A typical finance package will include:

  • Tenant improvements (TI) – if a separate real estate entity and core/shell will not be a part of your anticipated debt,
  • Equipment loan, and
  • Working capital via a line of credit (LOC)

Based on the credit history of the ASC partners, you should be able to obtain 70-80 percent loan to value on the TI. Investor contributions will be required to make up the remaining TI balance of 20-30 percent. Higher loan to value percentages (90-100 percent) are often available for equipment. The LOC will initially be revolving but, once your center is more established, the credit line is often rolled up into a fully amortized note.

Comparing Lender Options

After you receive the proposals, carefully evaluate the terms. There can be many variations in these proposals. Try to create a solid apples-to-apples comparison. Some variables to compare include rates, fees, maturity dates, early pay-off terms, corporate guarantees, and personal guarantees. Most of the language in loan agreements is derived from a standard template. You may want to have your attorney review these agreements, however, to ensure there are no hidden issues or concerns.

Although selecting the lender with the best terms may seem logical, make sure you factor into your decision your view of them as a long-term partner. Consider the banker’s accessibility, promptness, and flexibility. You may want to consider the location of the bank and how often you will need to physically visit it, if at all. Is the lender equipped to meet all your service needs, including digital services?

Ask questions such as:

  • How many ASCs do you currently work with/have worked with?
  • Who will be our direct contact should we have any questions or concerns?
  • What happens if additional funds are needed in the future or a re-amortization needs to occur?

A good lender will be straightforward and honest in his/her responses. Their focus should be on building a lasting relationship. If the bank doesn’t feel like a good fit for your business or service needs, it makes sense to look elsewhere. It’s important to find a lender who fits your business needs and feels like a good fit for you and/or your partners.

The Right Banking Partner

Selecting the right banking partner is an important early step in ensuring the success of your de novo ASC development project. Look for someone who is knowledgeable about your industry, your business needs, and the financial factors for success. The right lender will help transitions occur smoothly throughout the process. Knowing you have a financial expert who can help in times of need is reassuring and will let you focus on other matters that will make your de novo ASC an overall success!


Richard DeHart, Principal Partner

Does Securing a Team Partner Make Sense for Your ASC?

Does Securing a Team Partner Make Sense for Your ASC?

By | ASC Development, ASC Management, Leadership | No Comments

I recently read a theory about teams in the workplace from a variety of sources including General Stanley McChrystal’s book, “Team of Teams,” which entails a process of employing many small specialized teams to tackle large complicated issues. Hiring teams of individuals in unison to accomplish a goal is not new to many businesses. When college football teams change head coaches, for example, an entire staff of ancillary/associate coaches may accompany the new coach. Thus, a new team is hired.

In other cases, a team of individuals is assembled one at a time. For example, I have a friend in the advertising business who has worked as part of a team which was assembled over the years and hired by different agencies to provide writing and graphic design services. The individuals that make up this advertising team were hired one at a time as the agency grew. In music, there are many famous teams of song writers. In the corporate world, companies purchase other businesses and acquire teams to add a service or function they do not currently possess or offer. Think of Google’s acquisition of Android, Nest, Waze, and YouTube

Hiring teams can also occur via outsourcing. Or as I prefer to call it, by securing a “team partner.” Groups seek out organizations to partner with that specialize in ready-built teams in their respective industry, rather than build a team from scratch.

Outsourcing has at times received a negative reputation. Many business leaders question outsourcing anything. However, health care is morphing and changing daily. If a leader does not take the time to assess opportunities or approaches outside their organization’s usual way of thinking, maintaining the status quo could become detrimental and costly. It is perfectly normal, and oftentimes most beneficial, to ask for help in finding and hiring teams from an industry expert.

Why should an ASC consider hiring a team partner?

  1. Locate and tap into existing expertise. Hiring an industry team partner allows an ASC to quickly access qualified candidates with a history of success. While past success is not a sure sign of future success, it is a much better indicator than no past experience or a history of no success. While there are no guarantees a new internal team will succeed, the proven track record of a team partner is generally worth the price – both in dollars and time.
  2. Time is of the essence. You will rarely hear an organization say, “There are no time constraints to launch this project or fix this issue.” While building expertise from within, or tapping into internal resources may seem safe, it typically isn’t expeditious in our fast-paced health care environment. Learning takes time. Becoming an expert takes even more time. Often, learning on the job is not a luxury we possess. A team partner allows for immediate impact.
  3. No team bonding needed. High performing teams have a proven track record of working extremely well together. New teams, on the other hand, need time to create chemistry and build trust. Selecting experienced individuals with the proper skill-set and culture, then creating a team to elicit results and meet expectations is time consuming. Consider hiring an ASC team partner to access established teams. Bringing on an established team provides more timely dividends.
  4. Internal change is difficult. If change was easy, there would not be a multi-billion dollar industry built around helping individuals or organizations with their change management efforts. Many organizations will hire a single individual or even multiple individuals to create a new service offering. Within a few months or a year, those individuals may begin to think and act like everyone else leaving their original goals unaccomplished. Team partnering allows an organization to tap into an alternative corporate culture to advance a new initiative or gain buy-in to a critical mindset change.
  5. Acquire the crossover effect. Organizations experience a period of plasticity in their identity when there is a large influx of new employees. This period of change is known as the crossover effect. The crossover effect can be viewed as positive disruption. The spread of new ideas and new ways of working bring new life to the host organization. Often a newly hired team can affect other, more established teams within the organization via positive disruption.

Business owners and leaders are all striving for gains and improvement in the performance of their people and organizations. In many cases, changing our perceptions, practices, and personnel will be required to achieve those gains. Thoughtfully consider if hiring team partners might help your ASC acquire the individuals needed to facilitate some of those changes in the most expeditious, beneficial manner possible.


Robert Carrera, President/CEO

Implementing a Patient Texting Program at Your ASC

Implementing a Patient Texting Program at Your ASC

By | ASC Development, ASC Management | No Comments

Over the last two decades, texting has grown into one of the world’s most effective and accessible communication methods. However, there are still some professional service sectors where more traditional communication (e.g. phone, mail) is more common. It may be surprising to know that some health care entities are beginning to offer patient texting programs, sending important reminders to patients. For those in the ASC industry, this is an exciting opportunity to demonstrate to patients you care about modernizing and updating their delivery of care as well as your interactions with them. Is your ASC poised to take advantage of this chance to show you provide the best and most convenient options?

Here are a few interesting statistics about smartphone and text messaging use:

  • Ninety-five percent of Americans own a cellphone of some kind.[1]
  • Texting is the most widely used smartphone feature, with 97% of Americans using it at least once a day.[2]
  • Ninety percent of all text messages are read within three minutes of their delivery.[3]
  • It takes the average person 90 seconds to respond to a text message.[4]
  • Texting is for everyone. Ninety-four percent of smartphone users 70 and older use text messaging on a weekly basis.[5]

Statistics like these helped inspire our ASC to implement a patient texting program in November 2017. Before launching the program, many of our patients were receptive to the idea of receiving text messages from our ASC. As part of our program, patients are asked if they want to receive text messages from us when providing their medical history through our online portal. An average of about 80 percent of our patients opt in.

We hoped that by leveraging the power of texting, we could improve the experience of our patients and staff.

Developing the Texting Program

Our texting program is managed through an online patient portal vendor. Working with this company, we customized a series of automatic text messages which are sent to patients preoperatively and on the day of surgery. We carefully crafted our messaging and determined the most appropriate time for message transmissions. This “automated clinical pathway” provides instructions and prompts patients to complete important steps in their procedure preparation. Personal health information is never transmitted to maintain HIPAA compliance.

Here is a summary of our text messages:

Two days before surgery, morning. Our first message asks patients to confirm the date and time of their procedure.

If patients are unable to make their appointment, the message advises patients how to reschedule.

If patients confirm their appointment, they receive another automated message reminding them to review their physician’s preoperative instructions.

Two days before surgery, evening. This message provides instructions about what patients need to bring with them on their day of surgery. We also remind them to bring a method of payment and ensure they arrange for transportation.

Day after surgery, morning. Our final automated message thanks patients for allowing our ASC to provide care during their surgery. It also expresses our hope that they are recovering well. If there is a problem with their recovery, the text message instructs patients to call the ASC and ask to speak to a nurse.

Note: Patients can opt out of receiving texts from the ASC at any time. For patients who choose to do so, and those who do not opt in to receiving texts when providing their medical history, we communicate via phone and/or email.

Texting Program Benefits

Due to the widespread use of text messaging, patient texting programs are primed for success. During the first three months of this program at our ASC (November 2017-January 2018), all patients who opted to receive text messages responded to the automated messages. Most confirmed their appointment through the text message; the remaining called the ASC.

Here are some of the tangible improvements your ASC may experience after implementing an ASC patient texting program:

  • Decrease in number and duration of nurse calls to patients (savings of about 10 minutes per call)
  • Decrease in staff hours per case
  • Increase in staff efficiency and satisfaction
  • Increase in patient compliance with physician and ASC instructions
  • Decrease in patient no-shows and cancellations
  • Increase in patients paying for care prior to day of surgery (an unexpected benefit)

Growing the Patient Texting Program

After experiencing the success of a patient texting program, ASCs may consider exploring ways to expand the use of texting. One idea is to incorporate front office staff into the patient texting program. For example, after verifying benefits, front office staff may choose to send an automated text message to patients. The message could indicate patient financial responsibility after verified insurance deductions, and prompt the patient to arrange for payment.

Another solution is sending a one-time text message to patients. This would come in handy if, for example, there was a significant snow storm or catastrophic event and the ASC needed to close. The ASC could send a text to all affected patients on the surgical schedule.

One other area to grow a patient texting program is sending text updates to family members in the waiting area. These would provide an update on the status of loved ones in surgery.

The Importance of a Patient Texting Program

An ASC patient texting program demonstrates to patients your ASC cares about consistently modernizing and updating your health care services with a focus on what works best for patients. This is a powerful message to send to your customers in the ASC industry. Studies show 64 percent of consumers prefer texting versus a phone call for customer service needs and 77 percent of consumers are likely to have a positive perception of companies that use text messaging.[6] In the ever-changing health care market, texting is expected to become an even more valuable communication tool going forward. You can bookmark this as a 2018 ASC industry trend.


Michaela Halcomb, Director of Operations


[1] http://www.pewinternet.org/fact-sheet/mobile/

[2] http://www.pewinternet.org/2015/04/01/us-smartphone-use-in-2015/

[3] http://connectmogul.com/2013/03/texting-statistics/

[4] https://www.ctia.org/

[5] https://www.tatango.com/blog/94-of-seniors-are-sending-text-messages-weekly/

[6] https://www.openmarket.com/blog/infographic-consumers-favor-sms-messaging-yet-online-retailers-are-missing-the-massive-opportunity-to-engage/

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