Proper Business Setup and Organization of OBS

Most office based surgical facilities are developed under a separate corporation that is independent to the practice corporation, usually an LLC, an Inc., or, a LLC that can be elected to be a S-corp for tax purposes. As a separate business entity, the OBS corporation may charge a facility fee to the patient. Collecting a facility fee from the patient does not constitute a Stark Violation or ‘Self referral’.

As OBS facilities do not meet CMS Conditions for Coverage, a facility fee can not be collected from commercial insurance companies or medicare. In most states, a certificate of need is required to be able to develop a facility that is CMS certified. In addition, the requirements are significantly greater. It is for this reason that many states specify that the words Ambulatory Surgery Center do not appear in the official business entity name.

An LLC is significantly quicker to establish than a professional corporation such as a P.C. or PLLC as verification of any professional status is not required.

Having a separate business entity for the OBS also serves to separate the liability in the event that the OBS is leased out to another surgeon.

Compulsory disclaimer: None of the information within this message is intended to be legal advice. This is strictly our opinion of the interpretation based upon practical experience and research. Working with a qualified healthcare attorney to set this up right is crucial.