ASC Buy In

[ENT Doc]

Get detailed financials, specifics on share valuation, buy out process, age of the investors, case diversification, where assets are in their life, any new updates planned, how it’s run (efficiency), incentive structure of the employees, etc. May be a great opportunity, may not. Depends on the share valuation and reasonable projected dividends, on an after tax basis. Did they tell you what multiple of EBITDA or otherwise the shares were valued at?

[WealthyDoc]

csbest wrote:

Proceduralists can buy in but a famil medicine doc not doing any ASC-based injections or procedures cannot is my understanding.

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Correct.  Stark laws curbed physician investments in entities that they refer to but are not involved in (e.g. a hematology lab).  The ASC can be Stark-Exempt only if it is an "extension of your practice."  That is legally defined and most surgery centers require some guidelines (e.g. 1/3 of your eligible cases or 50 / year be done there).  It is a place where you work, not just a passive investment.

[csbest]

Proceduralists can buy in but a famil medicine doc not doing any ASC-based injections or procedures cannot is my understanding.

[Complete_newbie]

Can non-physicians own surgical centers? Just wondering. By all accounts - surgical friends- have had great returns on this.

[csbest]

It’d be dividends based on number of shares owned that pays every other month. No differentiation between specialties; the more shares you own, the more you get paid. Based on discussions with some of the surgeons in my group, they seem pleased with their investment thus far.

[ACN]

My groups ASC offers X shares per year for a few years till you max out at Y once you are offered a buy in. They pay quarterly distributions per share. Thus once you are fully bought in, everyone receives the same profit per share.

There may be a clause that non surgical specialists can only purchase Z amount of shares, while ortho surgeons can by ZZ amount.

Needless to say, it's very lucrative and I will be purchasing shares asap (have to be partner).

[DCdoc]

Do you capture a % of the facility fee for your own cases? How is the facility fee revenue distributed? I have many ortho friends earning mid to high 6 figures from their portion of the facility fee for physician owned ASCs, totally separate from the professional fee components.

[WealthyDoc]

I have a lot of experience in this area.  The investments are almost always worth it.  Some of it depends on your local politics, referral volume, payers, etc.  Generally, ortho has enough clout and resources to set things up right.

I have LLC for investments but I never felt the need to buy ASC shares in one.  You will own shares in an LLC or co that has already been set up so likely that shields you from liability (and honestly I don't think there is a lot of liability).  You should disclose to your patients though that you are sending them to a facility where you are an investor and they have the right to go somewhere else.

Talk to one of the other investors to see how much there dividends are to figure out how long it will likely take to get your money back.  There is some risk but the rewards are pretty big in my experience.  I have invested in a lot of centers over the years and have no regrets.  Search this topic on the forum because there have been several others with the same question and some detailed answers were given.  Feel free to PM me also if you like.  Good luck on the great opportunity!

[csbest]

PM&R/Pain Medicine doc here. I’m the only non-surgeon in an ortho group. I’m nearing the end of year two of my contract and have been offered a chance to buy shares in the ASC where I do the majority of my spine injections.

1) If any readers have been in my same position, had this been a good investment for you? I’m tired of leaving all the profits of the facility fees on the table.

2) Is there a potential liability I have to worry about if the ASC gets sued by a patient of one of the other docs?

3) Should I buy this share through a separate LLC?

Thanks in advance!