Mississippi Hospitals May Establish Single-Specialty ASCs Without CON Review Under New MSDH Rules
Mississippi hospitals will have greater flexibility to own and operate single-specialty ambulatory surgical centers (ASCs) following revisions to the Mississippi State Health Plan (MSHP) which become effective on May 29.
In recent years, surgical procedures have been increasingly shifting to outpatient settings such as ASCs, and this trend shows no sign of abating. However, Mississippi hospitals have faced challenges in establishing or investing in ASC facilities due to Mississippi’s certificate of need (CON) laws.
Mississippi law provides that no person may offer “ambulatory surgical services” without first obtaining a CON unless that person has provided such services on a regular basis within the previous 12 months. The requirements to obtain a CON—which are set forth in the MSHP—generally have made it difficult or impossible to obtain a CON to establish a new ambulatory surgical facility in Mississippi. However, the statutory definition of an “ambulatory surgical facility” excludes “the offices of private physicians and dentists, whether for individual or group practice.”
Based on this language, for over two decades the Mississippi State Department of Health (MSDH) has recognized (based on a trio of Mississippi Attorney General Opinions) an exception for so-called “single specialty” ASCs which are owned by physicians or dentists and only offer a single surgical specialty as being the “offices of private physicians” (and therefore exempt from CON review), even if these facilities are certified by Medicare as an ASC.
Based on this exception, physician groups have been able to establish single-specialty ASCs through the filing of a request for a determination of non-reviewability (a relatively simple, non‑adversarial administrative filing) rather than having to undergo the more burdensome CON process.
More on the Final Rule
In order to increase access to care and provide greater flexibility for hospitals to offer outpatient surgical services in their communities, the MSDH recently published a final rule amending the MSHP to clarify that hospitals may also own or operate single-specialty ASCs. The final rule, which goes into effect on May 29, amends Section 701.01 of the MSHP to provide:
11. Single Specialty Ambulatory Surgery Facility: A single-specialty ambulatory surgical center (“ASC”) is not considered an integral part of an institutional health service if a hospital or hospital’s parent, subsidiary or affiliated entity directly or indirectly
(i) employs or contracts with physicians, dentists, or health care professionals who own the ASC or practice at the ASC
(ii) owns, in whole or in part, the incorporated medical group that owns the ASC
(iii) jointly owns the ASC with physicians, dentists, or health care professionals, independently or by incorporated medical groups, or
(iv) solely owns the ASC for credentialed physicians (whether employed, contracted or independent) to perform surgical procedures in the ASC that qualify for single-specialty status.
The establishment of a single-specialty ASC does not require CON review; however, the facility must submit an application for a determination of non-reviewability prior to establishment of the single-specialty ASC.
After the new rule goes into effect, hospitals will now have the opportunity to establish and operate single-specialty ASCs—either owned outright, or as joint ventures with physicians—without going through the burdensome CON review process. As more surgical procedures shift from the hospital setting to the ASC setting, this new regulatory flexibility will offer hospitals increased opportunity to provide care in their communities.
If you have any questions regarding the requirements to establish or invest in a single-specialty ASC, please contact Blake Adams or another member of the Phelps Health Care team.
