This episode’s specialty spotlight is on Ambulatory Surgery Centers (ASCs)! Guest Woody Moore, also known as “The Physicians Advocate,” has devoted his career to operating and consulting for licensed health care facilities. In this episode, we discuss the safety of ASCs, how to set up an ASC, and regulatory considerations. Woody even shares his own experience as a patient at an ASC!
Listen to the full episode using the player below, or by visiting one of the links below. Below is the episode’s transcript which has been edited for readability. If you have any questions or would like to learn more, email us at email@example.com.
Intro: [00:00:00] Welcome to Legal 123s with ByrdAdatto. Legal issues simplified through real client stories and real world experiences. Creating simplicity in 3, 2, 1.
Brad: Welcome back to another episode of the Legal 123s with ByrdAdatto. I’m your host Brad Adatto with my cohost Michael Byrd.
Michael: Thanks Brad. As a business and healthcare law firm, we represent clients in multiple sectors and multiple specialties, especially healthcare.
Brad: We do.
Michael: This season our theme is specialty spotlight where each episode we’ll visit about some of the nuances that can be found from a business and healthcare perspective in the various practice specialties.
Brad: Yeah and Michael, before we put a spotlight on today’s guest and today’s specialty, I know that you’re well-read.
Michael: This is true.
Brad: Yeah so you like reading articles. Well, I found this fascinating article that I think we should share with the audience. Now, this article covered strange aspects of different cultures and different things about different countries. For [00:01:00] example, did you know that in Japan they’re facing a ninja shortage?
Michael: Hmm, let me guess that during the pandemic all the ninjas started re-examining their lives and they’re part of the great reshuffle or whatever we’re calling it these days.
Brad: I don’t know. That could be true. Michael, I’ll have to fact check you on that. What the article said was that there are, apparently in Japan, a lot of ninja shows and there’s a dying tradition of these companies that used to train these properly trained ninjas. Maybe we should send them some of those winners of the American Ninja Warrior show. Have you ever watched that one?
Michael: Yeah. I think they’d be disappointed that they would not have the fighting skills they may want. They would be really good at obstacles.
Brad: Yes. Maybe that’s a little bit different. Fair enough. All right. I have another question for you that I found interesting. What number do you call in South Korea to report spies? [00:02:00]
Michael: That’s really random and 911?
Brad: You’d think so, but in South Korea they actually have an emergency number that you’d call, number 113. So how about that? All right. Another fun one. Do you know what country has the most pyramids in the world?
Michael: These are really specific and random questions today, Brad. Can you look away for a minute and maybe focus on Riley while I’m here? I’m not doing anything. I’m not typing.
Brad: You’re not typing?
Michael: I’m gonna guess Sudan.
Brad: Wow. That’s pretty good, Michael. I mean, just randomly that you came up with that.
Michael: I just happened to know that.
Brad: Yeah, it was amazing. Yes, that would be correct. Most people think Egypt has the most pyramids, but believe it or not, Sudan has somewhere between 200 and 250 pyramids while Egypt only has between 118 and 138, which I found fascinating about this article. How do they still not know? I mean, isn’t it eventually you count and [00:03:00] it stops. I just couldn’t understand. It’s a huge variance. All right, one more. Do you know what continent does not allow McDonald’s or does not have a McDonald’s and does not have dogs on it?
Michael: Again, super random connecting McDonald’s and dogs. I hope that’s the end of those connections. I mean, Antarctica is a pretty obvious guess.
Brad: Ooh, good one, Michael. Look at the big brain of Michael guys. Yes, that’s correct. Although, there’s McDonald’s on every continent except for Antarctica and dogs have been banned from Antarctica because they don’t want the dogs to spread any diseases to the seals so there you have it. Last question, do you know anyone who’s ever had heart surgery in an ambulatory surgery center?
Michael: Again, super specific, Brad. I’m guessing you’re starting to connect us to our guest today. [00:04:00] Is that where you’re going with this?
Michael: Okay. All right. Well, let me introduce today’s guest and then maybe we can learn a little bit more about that.
Brad: All right.
Michael: Our guest today is Woody Moore. For over 40 years, Woodrow M Moore, as he’s formerly known, devoted his career to developing and operating licensed healthcare facilities and serving physicians. For 27 of those years, he’s been running the consulting firm that he founded called the Physicians Advocate. Mr. Moore is the honor recipient of Oklahoma Hospital Association, Outstanding Health Care Administration Graduate Student, from the university of Oklahoma health sciences center. He’s recognized nationally as a CEO to know by Becker’s healthcare review. He has served as an S3 operations noncommissioned officer in the Texas state guard’s medical battalion. Woody is recognized in Texas and Hawaii as the founder and executive [00:05:00] director of both the Austin based Legislative Advocacy Focus Texas Ambulatory Surgery Center Society and the Honolulu Hawaii based Hawaii ASC association, and pause for a slow clap to figure out how to do business in Hawaii.
Brad: Yeah. No doubt. I was just thinking the same thing.
Michael: He’s known for his public speaking and advocacy for his clients. We are just honored to have him on. Woody, welcome to the show.
Woody: Thank you, gentlemen.
Brad: All right, Woody. I don’t know which direction to go now. I mean, I kind of want to dive into Hawaii, but I think our audience probably needs to understand, before we even get to Hawaii, is it true that you had heart surgery at an ASC?
Woody: I did. Some would prefer that it be referred to as a procedure. That’s kind of, I’ve thought about this and it’s really kind of dependent on whether you’re the one on [00:06:00] the table or in the O.R. I guess. Yes, I did have a procedure in a cardiovascular focused, ambulatory surgery center.
Brad: Was this a decision you made or was it an emergency?
Woody: I had a few days to make a decision. A cardiac CT confirmed a 99% blockage of my right coronary artery. There’s some family history there, yada yada, but long story short is to me it was pretty emergent.
Michael: How did you feel? Obviously, you’ve dedicated your career working with surgery centers. Did you feel comfortable and confident in getting a procedure in a non-hospital setting?
Woody: I had no concerns about the ambulatory surgery center setting. Obviously the move has been, we’ll get into this more a little bit later, but the move has been over the years, more recently the last five years, [00:07:00] where Medicare certainly as the leader and then commercial payers have been pushing these type of procedures out, adding new codes to the surgery center reimbursement list, and then having served as a surgery center administrator back to the nineties, I just knew about the safety, the quality, basically zero infections. I was very comfortable. My only question after that was to my cardiologist to find out a little bit more about his experience. In fact, he was a partner in a cardiovascular focused, ambulatory surgery center. At that point I was done. I was ready to go.
Michael: That’s awesome. Well, now that I think about it, we probably should pause for at least some of our audience. Do you mind just kind of explaining what an ASC is or an ambulatory surgery center?
Woody: Sure. As a patient, just a generic patient out here, the general [00:08:00] public, I think that’s one of the biggest challenges that a physician has, a surgeon has, is to be able to help educate that patient on what the ambulatory surgery center, often referred to as ASC, really is. It is a surgical facility where patients have their procedure done safely and that does not require an overnight stay. I believe at this point, I’m involved on a national level, I believe I saw 6,000 ambulatories maybe 6,800, somewhere shy of 7,000 ambulatory surgery centers across the country, which tells you a lot about the movement, the opportunity for both the patients, the payers, and the physicians. Here in Texas, we have around 600. We’re number three behind California and Florida.
Michael: Wow. Well, tell the audience, [00:09:00] what drew you to start working with ASCs?
Woody: Long story short is I started my career out in the seventies, putting my hands on patients, went to college to play baseball, but worst day and best day, got cut from the baseball team. A little NAI division two school and bottom line was the coach took me up to a guy that I learned was called a certified athletic trainer. That was before the term sports medicine was even used in the mid-seventies. That day turned into a four year scholarship. Bottom line was that got me into starting Oklahoma’s first sports medicine clinic and then that got me into management. The real answer is, because of my sports medicine background, I was able to go into surgery. Oftentimes the parents would ask that I would go in there, be in there with the kid or whatever. That got me in touch with [00:10:00] creating rapport with the surgeons and the staff, often both inpatient and outpatient. I had the opportunity to see firsthand the efficiency in the outpatient setting as opposed to the inpatient setting, which led me to accept a job in 1994 as a surgery center administrator in Oklahoma City. It was actually a surgeon that named me or gave me the moniker, the physicians advocate. That kind of got me thinking about, well, okay, I don’t really like being part of a big corporation. I had been part of two majors in the past and done the academic thing with the University of Oklahoma. That just kind of quickly led me to, well, maybe you have an entrepreneurial spirit so developing ambulatory surgery centers became part of my, it was in my quiver of arrows if you will.
Brad: Yeah and talk about taking some lemons and [00:11:00] creating some great lemonade, hearing your worst and best day happening on the same day. It’s a great outlook in some capacity. Now that you’re kind of embedding yourself and as we talked about at the beginning of this podcast that you have this long history inside of ASCs, let’s dive a little bit deeper in. Tell us, what is one of the biggest patient challenges that an owner of an ASC will face?
Woody: Well, having, as you’d mentioned, been the founder of a couple of surgery center advocacy organizations with a lot of good people to help, educating that patient from the physician’s perspective about the safety, efficiency, that sort of thing, that in my mind is kind of the tipping point. Oftentimes the surgeons, other specialties, they have to be comfortable enough to take that [00:12:00] patient, especially to the ambulatory surgery center setting. Be very confident with all the surroundings and also have a say in that equipment personnel policy when that surgeon gets comfortable with that and the patient gets comfortable with that. I think that’s why we’ve seen the industry flourish.
Brad: Yeah. I guess it’s hard for me, even to think of a time with both of us, our dads being surgeons, of not knowing what an ASC is and not being comfortable with it. That’s an interesting take that it’s just educating the public at large or the patient in front of you. Is it always the same thing, like they just don’t know what the difference between a hospital and ASC is, or is that really where it just kind of boils down to that one major issue?
Woody: I think that is pretty huge. The other is really trying to maintain the state licensure, Medicare certification, [00:13:00] accreditation, if you will. I think a lot of, we’ll probably delve into this a little bit more, but I think a lot of surgeons don’t really realize, they may realize the potential return on investment, but I don’t think they often realize the requirements. This is not a passive investment. In other words, it requires, and we’ll get into some of the other regulatory matters, but beyond just educating the patient, the real work that needs to take place beyond just the surgeries, which they know quite well, but it’s the business side of ambulatory surgery center.
Michael: Yeah. Let’s talk about that a little more too. I would imagine on the business side, you mentioned a little bit, I guess for lack of a better word, what I heard you saying was education of the physicians are setting expectations of what they’re getting into. Talk a little bit more [00:14:00] about some of the business challenges that go into having an ASC.
Woody: So I’ve been fortunate in that even as a small business, a micro business, if you will, it’s just me, to get a call and the call usually goes something like this, Hey Woody, heard about you from so-and-so. We think we want to develop an ambulatory surgery center. How do you do that? It was my challenge, before I get into their challenges, it was my challenge to try to find people who focused on much like your firm, healthcare specific, be domain experts, be healthcare attorneys, be healthcare architects, be revenue cycle management people. To kind of get to the point, I believe both [00:15:00] clinical regulatory compliance and the legal aspects are things that they need, those domain experts, just around them kind of a village approach to things. So helping them understand that I am not the guy that has all the answers, but I’m the guy that kind of among many other good companies out here have assembled some domain experts to help them get their vision out of the ground.
Brad: Yeah and I think, you said this earlier, it is fascinating to hear how Medicare and other commercial payers are starting to push more things into the ASC. I’d love to hear your thoughts of, I guess from the energy perspective, when ASCs first started again, let’s go back 30, 40 years, I guess maybe you can talk a little bit further on as to, is there a huge push now on just all types of surgeries going there, or is that just limited to the one that you had with the heart [00:16:00] surgery?
Woody: That’s a great question. The answer is the cardiovascular procedures are dare I say, relatively late in the game. As I understand how Medicare works, as an example, they take that time to look at quality indicators through accreditation and accreditation becomes very important, joint commission, other types of accrediting agencies. They take the time to look at the data. There are, ahead of cardiovascular procedures being pushed out, again, going back to the sports medicine side of things, knee procedures, as parents you can have your child, infant child have tubes put in their ears, get there by eight in the morning. You’re back at work in the afternoon as a parent. More recently spine and total joint procedures have been pushed out and again, based on the [00:17:00] surgeon’s comfort level with the outpatient setting that just makes a lot of sense. A lot of what we call higher acuity procedures have been pushed out for a number of different reasons.
Brad: Makes sense. You started talking a little bit about this a second ago, but I want to dive a little bit deeper into, for our audience to understand, what are some of the biggest healthcare compliance challenges that an ASC will see.
Woody: When a partnership is coming together and there’s one or two doctors that are kind of what I call the champions. I usually ask them in an interview in the beginning, why are you doing this? Why are you considering the ambulatory surgery center as an option? It ranges from, well, we’re not getting time at the hospital anymore, we don’t get to choose the equipment. In my particular case, my [00:18:00] surgeon said, we’re going to use the best stent. I had a balloon angioplasty and a stent put in. There’s those things. Those were their challenges. Their hopes are is that by owning their own facility and operating their own facility, which is kind of my little business model, then that they’ll have control over personnel, equipment purchases, things such as that. One of the biggest challenges for them is, back to the regulatory compliance aspect, is choosing who’s going to be a partner in those new partnerships. I’ve seen really a lot of thought put into it beyond just the revenue generation by that particular specialty, be it an orthopedic surgeon or others, or that they have a big practice and they’re well-established, and they’re on the right managed care plans [00:19:00] and things such as that. The real answer to that should be, are they good stewards? Are they known as good citizens in the community? Medicare certainly looks, the government has a lot of different ways to look at different things. I think that the founders of a particular surgery center partnership really need to drill down into that particular partner, because you’re going to be a partner, as you know quite well that sometimes those partnerships just don’t work really well. I don’t know if you’re leading into this, but I will just go ahead and say, I’d like to kind of divide that question into two parts. One is clinical regulatory compliance, and then I’m going to certainly yield back to you all about the legal compliance aspects at another point. Clinical regulatory compliance basically means they’re going to spend a lot of money on an ambulatory surgery center development. [00:20:00] At startup, you apply for a state license to become an ambulatory surgery center. That’s very critical. The receipt of that is very critical because that is the trigger for other surveys and it requires that the facility be built safely, fire rated, a number of different factors, very specific single use facility, clinic, or an in-office operatory. State licensure is the first trigger, which if you pass that then you get a Medicare survey to become a Medicare provider and you get Medicare certified, then the third, and perhaps becoming more important all the time is accreditation through any number of accrediting agencies. Why is that important? Because again, we go back to it’s about the data. [00:21:00] So to be able to add procedures, to be able to maintain those three critical clinical regulatory compliance elements, you’ve got to prove it through quality and things such as that and we as patients, now I’m talking as a patient again.
Michael: That’s amazing. I can’t believe our time’s up. Woody, we are so grateful that you came on. It was really insightful to learn kind of your perspective and hear about your substantial part of your career dedicated to the ASC world. What we’ll do next is say goodbye and on the other side Brad and I can kind of touch on some of these legal topics that Woody alluded to.
Michael: Thank you.
Woody: Thanks gentlemen.
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Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host Brad Adatto with my cohost Michael Byrd. Now Michael, as we talked about in the beginning of this podcast, our theme this season is specially spotlight. We just had Woody come join us and it was interesting in so many different levels because we had them join us on two levels. One as a patient who was recently in an ambulatory surgery center and secondarily as a person who’s been around it for almost 40 years now and, audiences members, in Hawaii also. Just letting you know in Hawaii, but he had some great observations, Michael, and I think one of the things from our audience that he alluded to is that putting together these ASCs are complicated. There’s a lot of different traps. [00:23:00] One of them, which he’s flat out said is the legal piece. I know we did an entire episode in season six speaking plainly about the pain of ambulatory surgery centers. In that particular episode, we highlight a couple of different things, which is building out an ASC. I mean, what he said is, why are you building it? In that particular episode, we talked about a surgeon who built out a facility to do surgery, but it got pivoted and they started doing more things about pain management. It didn’t really fit what they needed for that particular one. Before you jump in with your observations, I do want to address again for those who don’t know there are these rules called the stark and anti-kickback laws and for the ASCs we’re going to focus on anti-kickback laws and anti-kickback laws prohibits physicians from owning and controlling and on and on and on the whole kitchen sink worth of rules surrounding it. The point is that if you are a physician and you’re referring a patient, Medicare, Medicaid, Tri-Care [00:24:00] to a facility, which you have an ownership interest, you have to be very careful. What the government has done is issued certain safe harbors, allowing you to have ownership of those and the ASCs has its own particular safe harbors. One of the things is that a lot of times you’ll hear people talk about the one third rule, the one third test, depending on how they’re kind of throwing that rule out. That’s basically looking at a safe harbor where the government says, all right, you the physician who are surgeons, if you want this ASC to be an extension of your office, that’s fine but we will want to confirm you’re an actual surgeon. They’ve come up with these rules basically saying, look, if this surgery facility is yours, you’re a physician investor, one third of each of the physician investors need to do their services at that particular place over a 12 month period. The physician derives basically one third of fees from surgical sites. There’s another test that [00:25:00] goes back to if it’s a multi-specialty one where they throw in and that you’re doing one third of surgical services at this particular facility again, I’m butchering it a little bit just for you, audience members, to understand there’s a whole bunch of ands, and stuff. I know Michael, you love regulatory talk, so I’m gonna jump off as fast as I can. So tell me what was some of the things you observed about Woody?
Michael: What’s interesting is, I started thinking about ASCs from the view of the patient when I was listening to what he talked about it from that experience. It occurred to me that I think the public in general, including doctors, when they think of an ASC, they probably are really thinking of an operating room that’s not in the hospital, period.
Michael: The reality is that it, you have, we’ve talked about in office, surgical suites. We did an episode on that. I think, Woody used the word in office operatory or something to that effect, but they’re part of the practice and then you have ASC.[00:26:00] Well then you break it down even further, Woody talked about, well, what’s the purpose of you doing this ASC? Well, sometimes you have a group of doctors that are putting in an ASC together and you have multi specialties coming in and it’s a place to get some O.R. time and then sometimes it’s almost like a private practice is building its own little captive ASC that’s just for the owners of the practice. One of the traps that I commonly see in that last scenario is you’ve got, call it a half a dozen partners and then they’re going to build their ASC and then they start to quibble about usage and they’re like, well, hey, Dr. So-and-so operates 50% of the cases at the ASC and so he wants to get 50% of the profits from this.
Brad: Yeah. That’s a big, no-no, Michael.
Brad: I didn’t know if he knew that.
Michael: I knew enough from listening to you, Brad, where to raise the red flag.
Brad: Good for you.
Michael: And then [00:27:00] hand them to you.
Brad: In another season, I would’ve dinged you for that by the way.
Michael: Oh yes. That would have been ding worthy.
Brad: Yes. Well, good. Yeah. I mean, those are all great points. Again, from that perspective, for our audience to understand, is ASCs have been around for a long time. Physicians or entrepreneurs who are interested in learning more about them, just understand there’s certain traps and pitfalls that Woody is sort of outlining. If you are interested in going that direction, you definitely need to partner up with the right people as Woody was saying. Michael, believe it or not, we hit the end of the show again. I know. These things, these are flying by audience members, but don’t worry next Wednesday we’re back again with another specialty spotlight. We’re going to be looking at optometry with Danny Clark. Thanks again for joining us today and remember if you liked this episode, please subscribe. Make sure to give us a five star rating and share with your friends.
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