ASGs and Surgery Centers

[Guest MikeD]

Assume X is a surgery center and is owned by the owners of A, B, C, D and E, all doctor groups. All corporations are PCs. Would it be possible to argue that there are in fact 5 ASGs here, not one? Under that argument, we would be treating each doctor group as an FSO and the surgery center as the A-org.

Thanks.

[KJohnson]

You always have to look "both ways" especially in an A-Org analysis,and you raise an interesting point.

Suppose that the outpatient surgery center (OSC) wants a stand alone plan. You treat the OSC as the FSO and each Dr.'s office as an A-Org to that FSO and therefore you aggregate everyone. Then, assume there are a bunch of HCEs in A,B,C,D who your are excluding in the OSC plan. And, even though E is dominated by NHCEs who you are excluding, this doesn't cause you to fail 410(b) on an aggregate basis because of all the other HCEs that you have excluded with the other Dr. groups.

However, if you turn around and treat each Dr. as an FSO and the OSC as the A.Org to each FSO then you would not be combining the Dr. groups. (because while you combine all A-Orgs of an FSO you do not combine all FSO's of an A-Org.). Then you would have to test the OSC alone with each Dr. group incuding " E" and you very well might fail.

Again, I haven't gone back and looked at the regs and whether there is anyway to "pick" the larger ASG over the smaller ASG but you probably do have something you should run down in more detail.

[Guest MikeD]

The Regs don't really say which FSO you would have to use. I tend to think that you would use the doctor groups as the FSOs, because there is absolutely no interaction between the dctor groups (each group only interacts with the OSC). It just doesn't seem fair to subject all of the doctor groups to being in one large ASG...however, fairness usually doesn't come into play!