• Eric J. Yetter

Key Items to Consider About Ambulatory Surgery Center Buyers

Physician-owners of ambulatory surgery centers (ASCs) considering a sale should consider the following items when comparing potential buyers.

Management Fees

In most cases, ASC buyers will charge a management fee anywhere from 3% to 6% of net revenue. This fee is used to pay for management services to be provided by the buyer, but it should also be considered part of the negotiated transaction between buyer and seller. Certain management companies do not charge a management fee.

Management Services

ASC buyers usually provide management services post-acquisition. This is part of the value they bring to physician sellers – the ability to cede management responsibility to a group with more resources and influence – freeing them to focus solely on patient care. Management services offered usually consist of:

  • Access to a Group Purchasing Organization

  • Accounting Services

  • Benchmarking Based on Other Equity Owned Centers

  • Corporate Business Development

  • Legal Support

  • Human Resources

  • Corporate Revenue Cycle Oversight

  • Supply Chain Executive or Staff

  • Data Warehousing

  • Managed Care Contracting

  • Mock Accreditation Surveys

  • Oversight by Regional VP of Operations

Billing Services

Most ASC buyers offer billing services in some shape or form, and the ASCs they purchase may or may not be required to use them. This is a key consideration when selling your ASC, and the results of your current billing and collections should be carefully compared to what you would experience with potential buyers. Picking the right partner is critical in the long-term success of your partnership.

Buyers who do offer billing and collections services will typically charge between 3% to 6% of collections for those services.

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This post is for informational purposes only and does not constitute an offer, invitation, solicitation, or recommendation to buy, sell, subscribe for, or issue any securities. While the information provided herein is believed to be accurate and reliable, 127 Capital, LLC (“Physicians First”) and Ashland Securities, LLC make no representations or warranties, expressed or implied, as to the accuracy or completeness of such information. All information contained herein is preliminary, limited and subject to completion, correction or amendment. It should not be construed as investment, legal, or tax advice and may not be reproduced or distributed to any person. Certain Principals of Physicians First are registered representatives of Ashland Securities, LLC Member FINRA, SIPC. Physicians First and Ashland Securities, LLC are separate and unaffiliated entities. Securities and Investment Banking Services are offered through Ashland Securities, LLC.