ASA Asks OIG to Prohibit Anesthesia “Company Model”

By letter dated June 16, 2010, the American Society of Anesthesiologists (“ASA”) continued its efforts to request that the OIG intervene to issue a Special Advisory Bulletin prohibiting what is called the anesthesia “company model.” The ASA originally made the request to the OIG in March of 2009; however, to date, the OIG has not responded. Given that the company model has been gaining traction among ambulatory surgery center (“ASC”) owners, the ASA renewed its request and also attached an article published in March of 2010 specifically discussing the risks and concerns presented by the company model. The anesthesia company model involves the creation of a separate anesthesia company by the same or similar owners of the ASC. The establishment of this company essentially allows the owners of the ASC to share in the profits earned through the provision of anesthesia services at the ASC. The anesthesia company employs the anesthesia providers and bills for the professional anesthesia services. The same anesthesiologists who once held a professional service contract to provide anesthesia at the ASC and bill for those services are now required to be employed by the anesthesia company in order to continue to provide anesthesia services for facility patients. The ASA asserts that the company model is designed to incentivize over-utilization for anesthesia services since the owners of the ASC also own the anesthesia company and have a stake in the profits generated from anesthesia billing. The ASA notes that this problem leads to increases in the cost of care and may subject patients to unnecessary services. Moreover, the ASA takes the position that the company model results in anesthesia providers essentially being required to pay remuneration to the facility for the ability to provide anesthesia at the facility. Conversely, ASC owners respond that they have structured these arrangements to comply with the Anti-Kickback Statute.

As ASC owners continue to evaluate ways in which to increase revenues, it is unlikely that the company model and similar arrangements will go away anytime soon. ASC owners and anesthesiologists will clearly be monitoring the OIG actions as this issue heats up around the country. For more information on this topic, feel free to contact Abby Pendleton, Esq. or Carey F. Kalmowitz, Esq. of The Health Law Partners at (248) 996-8510 or (212) 734-0128.