Outpatient Surgery Magazine

Queasy Feeling - April 2017 - Subscribe to Outpatient Surgery Magazine

Outpatient Surgery Magazine, providing current information on Surgical Services, Surgical Facility Administration, Outpatient Surgery News and Trends, OR Excellence and more.

Issue link: http://outpatientsurgery.uberflip.com/i/809919

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Page 28 of 154

The risk of forced redemption This is not what busy physician-owners want to hear, but the ASC safe harbors were never intended to be used as a tool to exclude existing investors. Yes, lower performing docs can create an under- current of resentment and in some cases might create compliance risk. But hasty action to exclude a lower-performing surgeon can create regulatory risk for your surgery center. Some mistakes I often see centers make: • Forcing out lower-producing physicians. Using exclusion claus- es in your operating agreements to squeeze out lower-performing docs can backfire. Redemption provisions often put too much focus on the safe harbors instead of considering whether the AKS is vio- lated. • Letting the environment create "bad facts." Evidence of derogatory comments (deadwood doc), scheduling inequities, unfortu- nate emails or evidence of plotting to freeze out an investor can create more risk than failing to meet a safe harbor. • Threatening to involuntarily redeem shares. Pressuring under- performing investors to increase their volume of referrals to the ASC to meet safe harbors creates risk under the AKS. A letter demanding or even suggesting that a surgeon perform more surgery A P R I L 2 0 1 7 • O U T PA T I E N TS U R G E R Y. N E T • 2 9 risk presented by improper exclusions. In fact, many operating agreements contain provisions that actually create first source evidence supporting the claim of an excluded investor. There are ways to reduce the risk associated with excluding underperform- ing investors, but using the safe harbor requirements to force redemption is not one of them. — John H. Fisher, II

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