Surgical Ctrs exempted from ASG definition?

[MSN]

We have a prospective client that looks like an ASG. A podiatrist has his own practice and also owns 10% of a surgical center, where he performs a large portion of his surgerys. Based on all facts we have received, the independent practice is an A-Org and the surgical center is the FSO, creating an A-Org ASG.

This prospects accountant has indicated to them that the ASG rules don't apply to surgical centers because the minimal ownership. Has anyone heard of this view?

Ultimately, it is the clients responsibility to make the correct determination, but this accountants opinion has made me curious...

Thoughts?

[Bill Presson]

This feels so much like a trap question. Like, I'll give my answer and then everyone will start to laugh because I missed the subtle, yet obivous clue!

In any case, I think the accountant is full of....himself. I think surgery centers are one of the targets of the ASG rules. If they didn't apply there, exactly where would they apply?

I would ask him to show me where the regs give the exemption and let him spend his time on it.

[Kimberly S]

The accountant is certainly full of something! Healthcare businesses are presumed service organizations for ASG purposes, according to Derrin Watson's book "Who's the Employer." Since the ASG criteria are more concerned with business relationships than ownership, the accountant is most likely wrong.

[Jim Norman]

Perhaps the accountant is recalling the old proposed regs, now withdrawn, that deemed professional services to be management services, under this definition there were all sorts of potential ASGs in the medical field. Having this go away probably eliminates the managements services ASG but doesn't change the application of the A-org rules.

Is the surgicenter incorporated? If so, is it a professional corp? Maybe not. If incorporated and not a professional corp, it can't be an FSO to an A-org [see Derrin's Whose the Employer Q 13:7]. Of course it could work the other way around, where the medical practice is the FSO and the surgicenter is the A-org and they are regularly associated. Have to look at the ownership attribution rules.

[Mike Preston]

Jim, all I want to do is laugh at Bill and then...and then.... you make my head hurt.

[Jim Norman]

Jim, all I want to do is laugh at Bill and then...and then.... you make my head hurt.

Well, that's a switch. My work here is finished.