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ASC Joint Venture Causes Concern for the OIG

By Reed Tinsley
April 01, 2003

The Office of the Inspector General, in OIG Advisory Opinion Number 03-5, recently ruled whether an ambulatory surgery center (ASC) could be jointly owned by a hospital and a multi-specialty group practice that had a substantial number of physician members who would not personally use the ASC (the “Proposed Arrangement”). More specifically, the OIG was asked to provide an opinion about whether or not the Proposed Arrangement would constitute a violation of the anti-kickback statute.

Background

A “Surgical Center” entity was formed for the purpose of planning, developing, and operating an ASC that would be certified by Medicare. An acute care hospital (the “Hospital”), owned 49% of the Surgical Center, and a multi-specialty clinic (the “Group”) owned 51% of the Surgical Center. For each investor, the return on the Surgical Center investment would be directly proportional to the amount of capital that the investor contributed. The Surgical Center would maintain an open medical staff. It would be located on land owned by the Hospital and leased to the Surgical Center pursuant to a written lease.

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