Business organization of OBS
Once the decision is made regarding the legal structure of your surgical practice, your OBS can be established as a separate, independent corporate entity. The entity for your OBS can be an LLC or an INC.
An LLC is significantly quicker to establish than a P.C. or PLLC since verification of professional status is not required. The legal entity of your OBS can then be structured as an S-Corp for tax purposes.
This provides these additional benefits:
- The separate OBS LLC isolates liability if the operating room is leased to another surgeon
- The OBS LLC can bill patients a separate facility fee independent of the services performed and billed by the practitioner; this does not constitute a Stark Violation or ‘Self-referral’ violation
Other Considerations
- OBS facility fees cannot be billed to Insurance companies or Medicare because OBS facilities do not meet CMS conditions for Coverage.
- CMS requires a certificate of need and other significantly greater requirements to develop a CMS certified facility.
- For that reason, many states prohibit the use of the words “Ambulatory Surgery Center” in official business entity names.
Compulsory disclaimer: None of this information is legal advice. This is strictly our opinion and interpretation based upon practical experience and research. Working with a qualified healthcare attorney to set this up right is crucial.
