Steps to Building a Surgery Center

By Caryl A. Serbin, RN, BSN, LHRM

You and your partners decided to build an ambulatory surgery center (ASC). You chose an experienced operational development firm, healthcare attorney, contractor, and equipment planner, and you also involved your CPA. You have already accomplished the first steps, including:

1. Determining who you wanted as partners (i.e., other physicians, hospital, equity partner)
2. Investigating the CON process and completing the application (if applicable)
3. Completing the feasibility analysis with the assistance of a financial expert and determining that the project is viable

You are now ready to begin the second phase. You meet with your developer and go over the project schedule (better known as the timeline). The task list is monumental and you wonder if the ASC will be completed in the promised time. The developer assures you that it will all fall into place; all you have to do is make decisions on a timely basis.

There are several phases or areas of development. Each phase has multiple steps and many of these steps require decisions by you and the governing body. The task list below shows the steps involved in each of the phases or sections of development. This list is not meant to be allencompassing and is not necessarily listed in a timeline format. It has been constructed to give you an idea of the broad scope of work to be accomplished.

These initial decisions and actions are customarily made with your attorney. Because of the special requirements of building a healthcare facility, be sure that your attorney is well versed in this area.

1. Formation of LLC
2. Develop operating agreement
3. Private placement memorandum
4. Sale of units
5. Determine governing body structure
6. Elect chairman of the board
7. Meetings with governing body

During this phase, your developer should provide you with several alternatives for financing and also assist you in determining the amount needed to be financed. Usually there are several funds that need to be established, such as construction, real estate, equipment, and operational needs (funds to finance your completed surgery center for a minimum of three months). A good tool to use in negotiating financing is your feasibility analysis, provided it has been prepared in an acceptable format for lending institutions.

1. Identify financing sources
2. Determine amount of financing required
3. Negotiate financing
4. Finalize finance package

An architect with ASC experience is fundamental in moving your project along in a timely manner. If they understand patient flow and ASC requirements this will cut down on expensive change orders, saving you both money and time.

1. Schematic design
2. Design development
3. Construction documents
4. Site work starts
5. Suite construction commences
6. Occupancy of space

This is an important phase — implementation of the appropriate tools and appointment of the proper people will enable your surgery center to run smoothly and needed decisions made without dissension. In a center with several partners, electing a steering committee that can make decisions for the entire group is a timesaver.

1. Approve governing body duties
2. Elect medical director
3. Medical director job description
4. Determine medical executive committee members
5. Elect chairman of medical executive committee
6. Chairman’s job description
7. Establish committee structure
8. Develop medical staff bylaws/rules and regulations

Choosing furniture and decor that is practical, comfortable and yet pleasing to the eye can be a bit of a challenge. Have your contractor employ a decorator who is familiar with healthcare facilities and can assist in necessary decisions. These decisions affect all areas of the surgery center including the waiting area, pre- and post-op recliners, cubicle curtains, stretcher railings, offices, etc.

1. Finalize furniture specifications
2. Choose artwork
3. Furniture installation
4. Interior signage

Equipment requiring support or attachment to walls, etc., must be decided on early so architectural drawings can make allowance for support structures. Other equipment should be discussed with each specialty to determine needs.

1. Determine equipment to be relocated
2. Purchase additional equipment
3. Moving company contract
4. Deliver movable equipment
5. Relocate existing equipment and furniture
6. Equipment biomedical checks
7. Biomedical reports
8. Staff in-services
9. Business equipment

When making decisions on software, consider all the needs of the ASC, such as registration, insurance verification, billing, inventory, state reporting, etc. In most cases, software should be specific to an ASC rather than a modified practice management program. After the decision is made on the software, ask the company what their recommendations are on the hardware needed to run the application.

1. Determine hardware needs
2. Order software
3. Other software
4. Order hardware
5. Install equipment, temporary location
6. Software questionnaire
7. Input data
8. Install equipment, surgery center
9. Staff training, temporary location
10. Staff training, surgery center

There are a lot of sections to this phase and all are equally important. Make sure your development company provides you with upto- date HR policies and procedures and assists you in making the job description templates center specific.

1. Determine HR structure
2. Determine benefit package
3. Finalize benefit package
4. Obtain state unemployment number
5. Set up payroll system
6. Set up direct deposit
7. Develop staffing matrix
8. Develop employee policy/procedures
9. Write job descriptions
10. Hire administrator
11. Hire clinical director
12. Hire business office coordinator
13. Interview and hire staff
14. Employee files

Most in-services and drills can be provided/ monitored by your development company. Contact the manufacturer for specific equipment in-services. Your development company may suggest outside services for providing specific in-services on specialized subjects such as CPR, etc.

1. Orientation general ASC procedures
2. Orientation to building
3. Mandatory in-services
4. Fire/disaster drills
5. Operational dry runs

Your development company should involve applicable staff in establishing committees, assigning responsibilities, and instituting required programs. See policies and procedures for each area.

1. Develop/implement performance improvement program
2. Establish compliance program
3. Select external compliance officer
4. Provide initial employee training
5. Establish risk management program
6. Select external risk manager
7. Provide initial employee training

Start the credentialing and primary-source verification early in the construction phase as it takes a lot of correspondence and time to complete.

1. Contract credentialing services
2. Send packets to physicians
3. Send packets to allied health
4. NPDB application
5. Primary source verification
6. Approval of privileges

Again, a section that has many steps. Several of these tasks may be done simultaneously while others must be done on a sequential basis. Some states take longer to process a Medicare application than others; find out your backlog for processing and surveying and make allowances.

1. Submit application to DHEC for state license
2. Submit application for Medicare
3. Construction survey
4. DHEC life safety inspection
5. State survey
6. Medicare certification survey
7. Application pharmacy license
8. Application DEA license
9. Application state controlled license
10. Application CLIA waiver
11. Obtain occupational license
12. Application biohazardous waste permit
13. Prepare center for survey

Ask your development company for guidelines for all business office tasks. Take the time to set up a good fee schedule based on procedure cost, demographic limitations, and managed-care reimbursement.

1. Establish scheduling guidelines
2. Establish any block schedules
3. Develop medical record structure
4. Develop fee schedule by CPT
5. Establish billing and coding procedures
6. Establish credit and collection procedures
7. Business office policies/procedures
8. Mail delivery
9. Mail service/overnight delivery

The financial well-being of your center is greatly affected by the quality of your managed care contracts. Experience, good negotiation skills, awareness of case cost, and knowledge of the specialties and their requirements are important attributes for the person(s) doing your contracting.

1. Obtain current contracts
2. Letter of assignment
3. Letters sent to payers

If your center is a joint venture, look to the hospital for services they may be able to provide under contract. Your development company should be able to provide you with a list of services needed when interviewing a service contractor.

1. Anesthesia
2. Management services
3. Billing contract
4. Employee health
5. Employee leasing
6. Pharmacy consultant
7. Risk management
8. Medical records consultant
9. Hospital transfer
10. Laboratory/pathology
11. Blood bank contract
12. Radiology

Again, if joint-ventured, the hospital partner may have some of these services available. Get three bids for each service and check references. Some of the services listed may also be available from your development/management company.

1. Linen/laundry service
2. Purchasing group
3. Supply distributor
4. Pharmacy distributor
5. Food services
6. Biomedical
7. Transcription
8. Security/alarm
9. Building services/maintenance
10. Housekeeping
11. Medical gas
12. Pest control
13. Trash/hazardous waste
14. Transportation
15. IS support
16. Accounts payable
17. Payroll
18. Coding/billing/collections

Setting up financial processes and assigning responsibilities. Your development company should be able to assist you in these tasks.

1. Establish AP procedures
2. Obtain all required insurance policies
3. Obtain state sales tax number
4. Develop first-year budget

Policies and Procedures

Templates for all of the policies/procedures, logs, plans, etc. listed below should be provided by your development company. Making them center-specific should be your responsibility with the aid of your consultants.

1. Clinical
2. Administrative
3. Medical records
4. Anesthesia
5. Lab/pharmacy
6. Inventory control
7. Performance improvement
8. Human resources/job descriptions
9. Credentialing
10. Pain management
11. Disaster plan
12. Technology disaster recovery plan
13. Environment of care/safety
14. Radiation safety
15. Compliance/HIPAA
16. Set up log books
17. Develop ancillary operating manuals

Supplies

A checklist of medical supplies can be obtained from your main supplier. Your pharmaceuticals can be ordered by your contracted pharmacist using the board-approved formulary as a guideline.

1. Review physician preference cards
2. Determine par levels
3. Order disposable supplies
4. Order pharmaceuticals
5. Order scrub suits
6. Order linen
7. Order office supplies

Marketing and Public Relations

Plan to market your center to the physicians' offices, their staff, and the community. Your consultant should be able to assist you in designing your logo and brochure and offer suggestions for the open house.

1. Design logo
2. Develop brochure
3. Develop other marketing tools
4. Visits to physicians offices
5. Luncheon all office staff
6. Plan open house schedule

Move-In

It's the day you've been working for. The ASC is open and the patients are waiting at the door. As you can see, there are a multitude of tasks to accomplish in developing an ASC. You and your partners made a good decision to build the facility and a great decision in asking for professional assistance. Now consider all of the tasks that face you on a daily basis to keep your ASC running smoothly, compliantly and profitably. Making the decision to use the services of an experienced management company will help your center grow and prosper.

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