December 1, 2013
Volume 77, Number 12
Practice Management - Results of the Second ASA Survey on the Company Model
James (Jay) R. Mesrobian, M.D., Chair
Committee on Practice Management
Sharon K. Merrick, M.S., CCS-P
ASA issued its first member survey on the company model in 2010. In order to understand more clearly how this problem currently affects ASA members, the Committee on Practice Management distributed a new survey on the company model in June 2013. The survey was updated to inquire about new types of company model arrangements. It was distributed to ASA members via ASAP and the Grassroots Network, and directly to ASA directors, component society presidents and select ASA committees.
The 2013 survey received 828 responses from all 50 states, Washington, D.C. and Puerto Rico, compared to 308 responses from 39 states in 2010. Of those 828 responses:
705 are “very aware” or “somewhat aware” of the company model.
306 practices provided service at the facility before receiving a company model request.
252 had experienced this problem with more than one facility; 53 had experienced this problem with more than two facilities.
The survey also revealed the following:
Overall analysis (Chart 1): 420 respondents (51 percent) had received a company model request, defined as a request to:
Contract with or become an employee of the facility.
Contract with an employment company owned by the facility’s referring physicians.
Contract with a referring physician’s practice.
Pay for space, equipment, drugs, personnel or other services.
Pay a portion of their professional fee to the owners of the facility.
Geographic analysis (Chart 2): Practices that received at least one of the above requests came from 38 states and the District of Columbia, broken down by Medical Group Management Association (MGMA) regions as follows:
Eastern: CT, DE, DC, MD, MA, NH, NJ, NY, PA, VA, VT
Midwestern: IL, IN, IA, MI, MN, NE, SD, WI
Southern: AL, FL, GA, KY, LA, MS, MO, SC, TN, TX
Western: AK, AZ, CA, CO, NV, NM, OR, UT, WA
States reporting the greatest number of company model requests included TX, FL and TN, making up 46 percent of the total. Twelve states did not report any company model requests (ME, NC, RI, ND, AR, ID, KS, OK, HI, MT, WV and WY).
Types of company model requests (Chart 3): Of those practices that had experience with the company model, the most common request was for the practice to contract with the facility, either as an employee or an independent contractor. The second most common request was to contract with an anesthesia company owned by the referring physicians. The full range and frequency of requests appears in Chart 3.
Outcome of company model requests (Chart 4): For practices that received a company model request, the most common result was that the practice rejected or lost the contract. The percentage of respondents who rejected or lost the contract (42.5 percent) almost doubled compared to 2010 (22.3 percent). The second most common result was that the practice accepted the contract.
Impact of the loss of contract (Chart 5): For practices that rejected or lost their contract, the majority (73 percent) indicated that the loss was concerning (represented a significant portion of business), very concerning (practice could not afford to lose a similar contract) or detrimental (practice considered selling or closing).
Impact of OIG Advisory Opinion: In June 2013, the Office of the Inspector General (OIG) issued an Advisory Opinion (12-06) commenting upon two company model arrangements and their potential violation of the anti-kickback statutes. The survey asked whether this OIG Advisory Opinion 12-06 had any impact upon existing company model arrangements. 82.7 percent of respondents indicated that the Advisory Opinion was not applicable to, or did not have any significant impact upon, existing arrangements.
Medical specialty of the facility owners (Chart 6): The survey indicated that gastroenterologists (49 percent) are the medical specialty most commonly associated with the company model. More than half of the respondents (55.9 percent) indicated that an ASC management company or other consultant is involved with ownership or management of the facility.
The 2013 Survey on the Company Model suggests the following:
- While still concentrated in the Southern region, the company model continues to expand in both prevalence and geographic range.
- Anesthesiology practices facing a company model arrangement frequently are put in a “no-win” situation, having either to lose/reject the contract or accept the arrangement.
- The repercussions of losing/rejecting the contract most often are significant.
- The majority of facility owners initiating company model arrangements are gastroenterologists. More often these physicians and/or the facility are using outside consultants/management companies to facilitate company model arrangements.
The Committee on Practice Management and ASA will continue to develop both federal and regional strategies to help members address – and ultimately defeat – the company model. Currently, ASA is conducting a survey to gather information on existing or proposed company model arrangements (see the notice on this page). Information collected will be reviewed by outside counsel and evaluated for potential use against the company model. The survey currently is running from November 1, 2013 to January 31, 2014.
James (Jay) R. Mesrobian, M.D.is a staff anesthesiologist with Aurora Medical Group, Milwaukee.
Sharon K. Merrick, M.S., CCS-P is ASA Director of Payment and Practice Management.