I want to Break Free: OBLs vs. ASCs

By Melody W. Mulaik

One of the hot topics of discussion for many organizations is whether to open a free-standing center to perform interventional procedures. And, to take it one step further, should the free-standing center be an outpatient-based lab (OBL) or an ambulatory surgery center (ASC)? The answer really does depend on the organization’s goals, resources and needs.

Regardless of which type of center you decide to operate there are crucial decisions that must be made prior to making legal decisions and expending capitol dollars. First, are there any non-compete contracts in place that would limit your operations? On April 23, 2024, the Federal Trade Commission (FTC) announced a ban on noncompete agreements nationwide; however, that does not automatically mean that any agreements currently in place are null and void. Additionally, there were immediate legal challenges to the ruling that may ultimately change the FTCs final rule, so it is important that you consult regulatory legal counsel to review any legal obligations.

For the successful launching of any new initiative, it is important that you have a robust and realistic go to market strategy to ensure that you will have a strong referral pipeline with corresponding reimbursement from payers for the services that you will provide. Details such as determining if an existing tax ID will be utilized or if a new one will be needed, will drive the amount of contracting and credentialling required for the organization.

How you will staff your organization is another key detail to address during the planning phase. Will existing staff be able to cover the free-standing location or will you need to hire new people? The answer to that question may depend upon the procedures that you plan to provide, and the mix of staff required to support these services. 

And last, but not least, is what equipment will be needed to perform your planned procedures. Equipment is the biggest expense for any organization so planning wisely is a critical key to financial success. Understanding the return on investment (ROI) for any piece of equipment is a must in the planning process. 

So, back to the question of OBL or ASC. The issue that best drives the answer is the complexity of the procedures to be performed and the level of anesthesia that will be required to perform the defined procedures. Procedures that require moderate sedation can be performed in either setting but procedures that require deep anesthesia may only be performed in an ASC. Second is the issue of ownership. OBLs are limited to ownership by physicians or medical professionals, adhering to the corporate practice of medicine laws in certain states. Conversely, ASCs can be owned by non-medical professionals or corporations, potentially presenting a higher barrier to entry due to associated costs and potential Certificate of Need (CON) requirements (if applicable).

Ultimately, the decision to establish an OBL or an ASC requires a thorough consideration and evaluation of various factors. Understanding the distinctions between ASCs and OBLs concerning procedure selection, ownership models, reimbursement structures, patient experiences, and anesthesia is essential for informed decision-making. While both settings offer advantages over traditional hospital environments, OBLs and ASCs offer patients a better patient experience for outpatient procedures where that setting is appropriate for the patient. By weighing these factors carefully, health care providers can optimize their practices to deliver exceptional patient care in the most suitable setting.