Getting Started With Legal & Regulatory Compliance for ASCs

There are numerous legal requirements and regulatory standards that apply to all ASCs across the country. To further complicate matters, there are state-specific requirements that overlay the federal requirements. Consequently, the legal and regulatory landscapes that ASCs must navigate is a diverse patchwork of laws, standards, and requirements that demand meticulous attention to detail.

“Trying to navigate these legal and regulatory requirements without the benefit of deep experience can lead to costly delays and put the entire project at risk. Fortunately, there are resources available to ensure your project satisfies all the legal and regulatory requirements during development and operation of your ASC,” observes Robert Eisenberg RN, MBA, CASC, Vice President, Ambulatory Surgery Lead at Sullivan Healthcare Consulting.

Here, we’ll take a closer look at some legal and regulatory elements you should integrate into your development and operation as you prepare to open an ASC.  

Government Regulations

Municipalities, states, and the federal government each possess the authority to enact and enforce various regulations in accordance with their unique healthcare priorities, demographic considerations, and public health concerns. Therefore, you must possess a deep knowledge of regulations at all levels to operate successfully and compliantly. 

Local and Municipal Regulations for ASCs

Local laws and regulations represent a pivotal aspect of the multifaceted landscape that ASCs must navigate when embarking on the journey to establishment. Local regulations vary from zoning ordinances and health and safety protocols to licensing and staffing regulations.

Given the intricacies and variability of local regulations, it’s paramount for anyone considering starting an ASC to consult with legal experts specializing in healthcare law and local regulations. 

State Regulations for ASCs

Most states require ASCs to obtain a state license prior to starting opening, although not every state does. Check your local jurisdiction to be certain. Many states may also operate under Certificate-of-Need laws, which demand that you demonstrate a real need for the facility that current providers aren’t meeting.

State licensure for ASCs ensures that healthcare facilities provide safe, effective, and high-quality services to patients. State licensing processes typically involve a comprehensive evaluation of various aspects of your ASC’s operations, infrastructure, staffing, equipment, and adherence to health and safety standards. Working with an ASC consultant can ensure that your operation is up to state standards before applying for licensure. 

Federal Regulations and Medicare Certification for ASCs

ASCs must meet the CMS’ conditions for coverage to enter an agreement with CMS. These conditions encompass an extensive scope, ranging from patient care and business operations to facility construction and record-keeping. Some of the conditions necessary for entering an agreement with the CMS include:

  • Being accredited by a national accrediting body or licensed by the state
  • Having a governing body that is legally responsible for the ASC’s operation
  • Developing and maintaining a quality assessment and improvement (QAPI) program
  • Maintaining a safe, sanitary environment built, designed, equipped, and maintained to protect patient health.
  • Maintaining complete and accurate medical records
  • Complying with federal, state, and local emergency preparedness guidelines.

While the CMS’ complete conditions and requirement for coverage can be found in Part 416 of the Electronic Code of Federal Regulations, collaborating with an ASC consultant and specialized legal counsel can ensure you interpret and implement the requirements compliantly. 

Stark Law and Anti-Kickback Statutes

Referrals play a pivotal role in the success of the ASC business model, fostering collaborations and ensuring a steady flow of patients. However, while referrals are essential, it’s imperative to recognize that they expose your facility to legal complexities concerning the Physician Self-Referral law or Stark law. Understanding how to comply with these regulations is vital for the compliant operation of your ASC.

To mitigate these risks, it’s paramount that everyone involved in your ASC’s operations—surgeons, physicians, investors, and stakeholders—fully comprehend the intricacies of physician self-referral regulations and anti-kickback statutes. Clear communication and education at all levels of the organization are critical for ensuring that everyone fully understands the law’s requirements.

Seeking legal counsel is a non-negotiable step if there’s any uncertainty about whether a referral could breach the Stark Law. An attorney with expertise in healthcare law can provide guidance, assess the particular situation, and help you navigate the complex legal landscape. Keep in mind that accidental violations are treated as seriously as intentional ones, so ensuring compliance is a much-needed, proactive approach to safeguarding your ASC’s reputation and financial viability.

Finally, it’s also essential to be cognizant of the protective mechanisms in place. Safe-harbor laws exist to shield physicians and surgeons from inadvertently violating the law while pursuing the best possible treatment for patients. Understanding when these provisions safeguard your ASC is crucial for retaining ethical referrals and staying within legal boundaries outlined by the Stark law.

Emergency Preparedness

Emergency preparedness is a critical element of bringing your ASC to market, and it is a formidable challenge given the stringent requirements at various governmental levels.

ASCs must comply with all applicable Federal, State, and local emergency preparedness requirements. This means ASCs must establish and maintain an emergency preparedness program that meets a variety of requirements, including the following CMS requirements:

Risk Assessment and Planning 

The foundation of your emergency preparedness plan is a thorough risk assessment. This involves evaluating potential hazards and risks, both natural and manufactured, that your ASC might face based on your location. Adopting an ‘all-hazards’ approach will prepare you for a wide range of emergencies that could impact your center.

Policies and Procedures

A comprehensive Policy and Procedure manual must be developed to address both Medicare and your accrediting body standards. Additional Policies and Procedures must be developed for the specific operations of your ASC. In addition to developing Policies and Procedures, they must be constantly updated and approved by the governing board of the ASC. Communication Plan

Effective communication is essential during emergencies. Develop a comprehensive communication plan that outlines how you’ll coordinate patient care within your facility, collaborate with external healthcare providers, and engage with local health authorities. Consider the specific challenges your location might pose, such as limited access to the internet or phone networks in rural areas.

Training and Testing

Educating your staff is paramount. Ensure that everyone is well-versed in the emergency plan’s procedures. Conduct drills and exercises to simulate emergency situations, evaluate your plan’s effectiveness and identify improvement areas. This hands-on experience will empower your team to respond confidently during actual emergencies.

In the ASC landscape, certain unique aspects apply:

  • Transfer Plans Exemption: While many facilities are required to arrange patient transfers during emergencies, ASCs are exempt from this specific provision. However, you will need a plan to transfer patients to a hospital via a transfer agreement if advanced care is required.
  • Variation in Patient Tracking Responsibilities: Unlike other healthcare facilities, ASCs only need to track patients before and during emergencies, not after.
  • Annual Testing Requirements: Your facility must participate in two annual emergency preparedness tests. The first could be a community-based drill if available. If not, you’ll conduct an individual facility-based drill. The second test can be another facility-based drill or a tabletop exercise.

Prepare for Success and Compliance with an Experienced ASC Consultant

Regulations for ambulatory service centers (ASCs) are dynamic and fraught with nuance. A single misstep in this area can cause significant delays or derail an ASC completely. With the level of investment necessary for starting an ASC, avoiding these pitfalls is critical for successfully launching a profitable surgery center.

Understanding all applicable regulations and connecting with the right partners is an essential strategy for ASCs to successfully surmount legal challenges and provide high-quality care to their communities.

Sullivan Healthcare Consulting has the experience and specific expertise to guide your group to create and operate a successful ASC that provides high-quality surgical care to patients conveniently and efficiently while achieving a healthy bottom line. Contact Sullivan Healthcare Consulting’s team of experts today to learn more about starting an ASC.

The information on this page provides a starting point for understanding the federal rules impacting ASCs, but is not a substitute for legal advice. Always seek a legal opinion regarding the specific facts in a particular case from qualified counsel that practices in this specialized area of law.

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