Beata Canby – Opening an ASC: Managing the Regulatory and Certification Process
Here’s what to expect on this week’s episode. 🎙️
🎙 Understanding how the regulation and certification process work for new surgery centers can be very overwhelming. Rules change from state to state, specific certifications depend on others, and as Beata Canby likes to say – there are many cooks in the kitchen.
Beata is a principal and partner at LeftCoast Healthcare Advisors, and she joins us today to break down the entire process, including the fundamental agencies to know, what order to get your certifications in, and tips for speeding up the process and staying organized.
📝 Most notably, Beata shared the option to combine accreditation with #CMS certification to streamline and simplify the process. Here are ten steps to Deemed Status, which may occur simultaneously or in a slightly different order depending on your state.
1. Certificate of Occupancy
2. State Department of Health License (if applicable)
3. Apply for Facility NPI
4. Submit online applications for CMS & AAAHC (or other accrediting body)
5. Receive application approval
6. DEA license & CLIA Waiver
7. Perform 10 demonstration cases
8. Notification of on-site survey readiness
9. On-site, unannounced survey (must include a case observation)
10. Submit CMA/AAAHC Plan of Correction (if needed)
Interesting in learning more about opening a new surgery center? Check out our previous episodes:
• Michael McClain – Opening an ASC: Navigating Payer Contracts
• Wil Schlaff – Opening an ASC: Conducting a Comprehensive Feasibility Assessment
• Dawn Pfeiffer – Ask the Expert: Best Practices for Opening a New Surgery Center
Find the full episode on Apple Podcasts, Spotify, or YouTube to hear all the details.
Episode Transcript
0:00
welcome to this week in surgery centers if you’re in the ASC industry then
0:05
you’re in the right place every week we’ll start the episode off by sharing an interesting conversation we had with
0:11
our featured guests and then we’ll close the episode by recapping the latest news impacting surgery centers we’re excited
0:18
to share with you what we have so let’s get started and see what the industry’s been up to [Music]
Show Topics
0:27
hi everyone here’s what you can expect on today’s episode beata Canby is a
0:32
principal and partner at Left Coast Healthcare advisors and she joins us today to talk about managing the
0:38
Regulatory and certification process while trying to open a new Surgery Center so this is the fourth episode in
0:46
our de novo series and this topic was one of our most highly requested as it can be so nuanced and there are just so
0:53
many moving Parts but Bayada does a great job of breaking down the fundamental agencies to know what order
1:00
to get your certifications in and tips for speeding up the process and staying organized in our news recap we’ll cover
1:08
another research study that compared chat GPT responses to ophthalmologists new surgical smoke evacuation
1:15
requirements United healthcare’s new prior authorization requirements or lack
1:20
thereof and of course end the new segment with a positive story about a woman who is severely paralyzed but she
1:28
got her voice and likeness back thanks to new technology that combines AI with
1:33
a brain computer interface hope everyone enjoys the episode and here’s what’s going on this week in
1:40
surgery centers [Music] hi bayata welcome to the podcast
About Beata
1:47
hello hello can you please share a little bit more about yourself and Left Coast Healthcare
1:54
advisors with our listeners yeah sure so my name is Bayada Canby I have a
1:59
background in hospital operations and strategy but my real focus is Construction in the built environment in
2:05
the ASC space so that’s designing asc’s getting them open activating them and
2:12
that whole span of work I’ve worked in both the U.S and Canada on hospitals and ASCS and Left Coast Healthcare advisors
2:19
is a newer advisory firm that I am part of a West Coast based and we do kind of
2:26
Soup To Nuts ASC Consulting so operations clinical process legal and
2:32
business structure kind of everything ASC is our wheelhouse very cool yeah I know Michael your
Why regulatory and certification are important
2:39
colleague was on one of the episodes recently as well and so I’m really excited to sit down with you today
2:45
because as you know we’ve been talking to a lot of different industry experts and Consultants about the process of
2:51
opening a new Surgery Center and whenever we do a poll of the audience on what they have the most
2:57
questions about it’s always the Regulatory and certification requirements and all the confusion and
3:04
red tape and paperwork there so could you provide some insight into why these
3:11
processes at a high level are so important yeah at a high level and really
3:16
basically you can’t perform cases you can’t open and you can’t get paid unless you follow all the rules and get
3:22
everybody on board and have all the right license and the way that it’s set up or the way that it works is there’s
3:29
really clear dependencies so you can’t get one without this other one you can’t get this one without this one so it’s
3:35
not just getting the right licenses it’s getting them in the right order so for
3:41
example as part of the process you need to do demonstration cases for CMS you can’t do
3:47
those without your state license and you can’t do them without a DEA license another example you can’t get insurance
3:53
to credential you without a state license so that all the different pieces and then the order are critical
What regulatory agencies to look for
4:00
sure yeah and I feel like that is the most stressful part for somebody going through the first time is like what do I
4:06
do first and where do I begin so you’ve mentioned a couple of these but what are the fundamental agencies to look for uh
4:13
regulatory accrediting bodies that really drive this process yeah I’d like to say there’s lots of
4:20
cooks in the kitchen when it comes to ASC regulatory the regulatory Gauntlet
4:25
and I would like to say it’s a short list or there’s some that are more important than others there aren’t so it
4:32
starts with your local construction and inspections department and that’ll be based on your city or your county and
4:39
then there’s also local business and tax agencies then you can go up depending on your state you may need a certificate of
4:46
need which can be a long and complex process then you get to your State Licensing
4:51
Board which could be Department of Health Department of Licensing the department of occupational health and
4:57
safety very State dependent there’s also attorney general and health authority
5:03
notification bodies CMS DEA
5:08
then third party accrediting agencies so those would be for example triple ahc
5:14
Joint Commission quad ASF if you’re doing Imaging or nuclear
5:19
medicine there’s a whole nother set of regulatory agencies you have to go through and then Insurance payers so it’s a long
5:28
list of folks that need to be involved in your regulatory review
Navigating the regulatory process
5:33
yeah definitely and I just feel like for the average physician or group of
5:38
Physicians trying to go through this it must be so overwhelming you know if you’ve never gone through this before
5:44
and I would imagine at this level there’s probably so many different consultants and advisory groups that you
5:51
can turn to for help right because and I also feel like no one should feel crazy for not knowing the order or where to
5:59
begin 100 it is complicated it is I’m gonna say it it’s difficult
6:06
and if you get one piece wrong it can put it all in Jeopardy and it’s this crucial time at your ASC where you may
6:14
have the keys but you can’t start generating Revenue so it’s just it feels like you’re just
6:21
spending cash so you want to do it efficiently as possible yeah okay so with so many agencies
How to organize the process
6:28
involved in so many moving Parts how can you organize it and where do you suggest
6:33
people begin I think that sequencing and planning key so where you start is either with a
6:41
pen and paper or MS project or smartsheet and you gotta write it all
6:47
down you have to write down every agency that will have to be involved depending
6:52
on your state and your location and then you’ve got to map out the durations and
6:57
the dependencies so you end up with this big Gantt chart of here’s what I have to
7:03
do and it is unique location to location so it’s not like you can go online and download you know key to opening a
7:10
surgery center in Kentucky it’s going to be different depending on your locality the way I like to think of it is start
7:18
local and expand out so start with that local agency that is
7:23
your local construction and inspection department and your contractor should support you in that then expand out to
7:30
local business and tax then go to the state then go Federal it’s just a nice
7:36
way to organize your thought process but definitely write it all down write down the cost for each because that’s
7:42
important to consider is the licensing fees and all of that and then the next thing is reach out to the agencies reach
7:50
out to the Department of Health reach out to your local construction and inspection department start to build
7:56
those relationships it really helps to know who to talk to and you can find all
8:01
those contacts usually online then ask colleagues ask people locally or nearby
8:07
you know what their experience was how they did it and most importantly ask
8:12
them about timing and delays in your local market another great resource for getting that information is local conferences so
8:20
local ASC conferences they have that very localized knowledge and they’ll also have potentially support around
8:27
that but talk to people because you’re not the first person doing this and there’s people out there that might be
8:33
able to give you tips and tricks yeah and with the conferences I would imagine the state ASC associations can
What is deemed status
8:41
probably offer some level of support or at least say hey I know so and so just
8:46
opened their Surgery Center last year let me put you in touch with them and I but I think that’s a great guidance
8:52
conceptually start local branch out because that’s probably confusing too like should I go right to CMS or you
8:59
know what do I do here yeah okay so let’s talk about deemed status
9:06
can you share what that is and how it could maybe help simplify the process
9:14
so deemed status is the term that’s used for when CMS contracts with an accrediting body to
9:22
perform the regulatory function so CMS will contract with let’s say AAA
9:28
HC and triple HC will do all of the review and triple ahc will do your
9:35
on-site survey so it’s like a third-party way for CMS to do things and
9:40
what I would call out is that it varies by state what those accrediting agencies
9:46
that CMS works with are and the process for doing it so a quick example in
9:52
Washington state today you have to go deemed status there is no other option
9:58
currently in Washington so you’re kind of forced into a relationship with triple ahc or an
10:05
accrediting body in order to get your CMS certification and that’s kind of a relatively recent change you know some
10:13
organizations are like well I don’t want to be accredited you have to in Washington state these
10:19
days you can let that accreditation lapse in the future if your insurance contracts let you but you have to go deem status
Accreditation
10:26
gotcha question if you don’t have that accreditation does that have any impact
10:32
on the surgery center Long Term does it help with parent negotiation rates or anything what could it do
10:41
yeah so accreditation is it’s a strategic decision now there’s some things you have to check certain
10:46
Insurance payers require accreditation so if you want to be contracted with that payer you have no choice certain
10:53
States like I mentioned require you to be accredited to get that CMS but there are some organizations that choose not
10:59
to because of financial reasons you know there’s annual fees involved and things like that it really is a choice and
11:06
there are several accrediting bodies out there that you can pick from but it really is a choice on just how you want
11:11
you know a lot of surgery centers will put it on their website that their quad ASF certified or triple ahc or Joint
11:18
Commission yeah so it’s just a way to stamp your quality and that you’ve been surveyed
11:23
status simplifies the process a bit but it’s not a simple process you know when
11:28
I think of it there’s 10 steps at a high level and they’re pretty much in order but at the same time sometimes depending
11:36
on your state you can do two concurrently or you can switch them around a little bit so the very first
11:42
step is you have to get your local certificate of occupancy that document and if you’re building new
11:48
or a TI your contractor will help work with you to get that that’s usually
11:53
issued by the fire department and it says you’re okay to have human beings in this space working
11:59
so you have to have that in order to occupy the building next up if your state requires a state license you got
12:06
to get your state license some states don’t require a state license but Most states do
12:11
next up you apply for your facility NPI so that’s a fairly simple process to get
12:17
a facility level NPI the fourth step is you submit your applications and you submit your CMS
12:24
application and your accrediting body application and again you can do that online
12:30
once that application goes in you should receive an approval letter from CMS
12:36
it may come from a company named Meridian or another company they are
12:42
Regional organizations that work on behalf of CMS next up I would say apply for your DEA
12:48
license is the next thing you want to do and there’s a couple different ways to go about it
12:54
you can go straight to the feds and apply for a facility license that’s going to take you the longest
12:59
you can go straight to your local DEA office in person that’s what we do here
13:04
in Seattle we walk up to a desk and we talk to a person so if you’ve got a local DEA office great way to expedite
13:12
the fastest and riskiest way to get a DEA license is to use your medical
13:18
directors DEA license to procure drugs but some doctors are not willing to do
13:23
that because it does result in some additional risk for them because it’s their personal medical DEA license
13:29
that’s then tied to the facility so really best option find a local DEA
13:34
office and walk in have that DEA license the next step is to perform your 10
13:41
demonstration cases so you have the drugs to be able to perform those cases you may be able to do self-pay and get
13:48
cash for those but you can’t bill insurance so there’s 10 cases that you got to do yeah can I ask a question
Getting the first 10 cases
13:54
about that really quick how do you go about getting those 10 is there any
14:00
one way most people do it or any tips for getting those first 10 cases
14:06
in my experience you ask the surgeons and say hey do you have a patient that
14:12
you want to pull in for this period do you have a patient that you don’t want to charge insurance for or that is able
14:18
to do cash pay so it’s really sourcing with the surgeons and finding having them
14:24
find the right patients gotcha and do they typically disclose anything to the
14:29
patient ahead of time hey we’re not that you know yeah
14:35
like we’re not fully open we have to do these 10 cases I think a lot of places do disclose the patient and also the
14:42
facility will be empty and so sometimes patients ask about that after you do those 10 demonstration
14:48
cases you want to notify CMS and the accrediting body of your on-site survey
14:54
readiness once you have that’s it’s an unannounced survey uh so there’s a couple of things
15:02
there so it’s an unannounced survey they must be able to observe a case so this
15:07
is where you have to let CMS and the accrediting body know of your opening hours so let’s say your business plan is
15:15
to be open long-term steady state five days a week all day long during this period you may say we’re
15:22
only open on Mondays and Wednesdays from this hour to this hour because you have to have staff there
15:28
because when the surveyor walks in there’s got to be somebody there and so you got to be open and ready to
15:34
go and you have to have cases running so it’s this kind of weird period and managing those opening hours
15:40
is key in communicating with the accrediting body that like we’re not open on Tuesdays don’t come on Tuesday
15:46
and then after the survey they will either say you’re good to go you passed or they’ll issue a plan of
15:53
Correction if they issue there’s a different level of findings so you submit this plan of Correction and say here’s how we’re
15:59
going to fix all the problems but I would caution if there’s what’s called a conditional finding which is a more
16:06
severe finding you have to wait three months to re-survey and so that can be a big delay so you
16:14
really want to make sure you’re ready for that survey and there are companies out there we’re one of them that will
16:20
come in and do a mock Readiness survey those are great they test your staff they test your operations they’re really
16:27
useful to do mock surveys yeah Status
Status
16:33
yeah that’s super helpful and for our listeners I will share this list in the episode notes no one has to
16:40
scramble to take things down but yeah that’s really interesting we did an episode a while ago about that mock
16:46
Readiness survey or also not even just a mock Readiness or just doing mock accreditation surveys in general when
16:52
you know your time is coming and I thought it was really interesting too and also you know being prepared for the
16:58
moment somebody walks in with the clipboard unannounced can be very stressful I would imagine if you’re not
17:04
prepared so that’s really interesting in your experience has there been any like
Conditional Findings
17:09
common conditional findings that people have found that have given them that
17:14
three-month delay or is that super rare no it’s not rare you know this is where
17:21
it really helps to talk to your network and your colleagues because every now and then the accrediting bodies kind of
17:28
they start focusing on something and there’s different Trends but those conditional findings often their life
17:33
safety their critical clinical patient care issues yeah but they can be avoided
17:39
by those mock surveys and testing yourself gotcha yeah that makes sense okay
Credentialing
17:44
Switching gears a little bit so we talked about pair contracts a week or two ago with your colleague Michael but
17:51
walk us through the credentialing and privileging piece of this how is that different from Pair negotiations and
17:57
what does this step really look like yeah so there’s two interactions that at
18:04
a high level that you’ll have with insurance payers one is negotiating your contracts and that’s what Michael spoke
18:10
about previously is getting your rates and your contracts in place the other portion is credentialing and you are
18:18
required to credential with all the different payers and both the facility and the providers must be credentialed
18:25
you must credential the facility first and then the Physicians add that new
18:32
site to their professional list of sites served so facility first then the docs
18:38
you know the estimated time to process these credentialing applications is 60
18:44
to 90 days but that can vary by payer and locality what I would say is start
18:50
early start as early as possible some payers will allow you to submit an
18:57
early application even before your CMS and state licenses are complete
19:02
they may tell you they won’t but in our experience if you push them a little bit they’ll let you submit everything and
19:09
they’ll just flag it that it’s not ready for review yet but at least you get it in
19:14
some payers state by state have really onerous requirements for credentialing
19:19
so the example I like to use is Michigan Blue Cross Blue Shield historically had
19:25
a whole separate process called the evidence of need process that was rigorous you basically needed to prove
19:34
that there was need in the community in order to get that contract now that program is currently suspended they
19:41
haven’t eliminated it but it is suspended and so that just means things change all the time with insurance
19:46
payers and then the second part is privileging and that’ll happen at the facility level
19:51
and you need to make sure you have policies and procedures and bylaws in place to support that privileging to
19:58
privilege different surgeons to do different procedures but the credentialing process is just a lot of
20:03
paperwork and you feel like oh I’m already working with a team on my contract negotiation this is a different
20:09
team that you’ll work with got it all the teams
Challenges
20:16
okay yeah that makes sense now zooming back out what are some of the most
20:22
common challenges that people typically encounter during this whole process that
20:27
you’ve walked us through I think the biggest one overall is delays
20:32
and delays for things that are out of your control so then I go back to your
20:38
Gantt chart or your schedule so that you can say oh no you know our State
20:44
Department of Health is running 8 to 12 weeks behind not uncommon then you gotta
20:49
slide things around on that schedule another one and your contractor should help manage this but for example in
20:56
Seattle our construction and inspections department is running really behind post covid so like a plumbing permit can take
21:03
months longer than you expected which delays your certificate of occupancy so
21:08
again talk to people find out what those local delays are and then have contingency plans and always go back to
21:16
that plan another risk and it’s something to plan for up front is that this whole process
21:23
remember you’re not generating Revenue but you’re generating expense you need
21:29
to have staff there you need clinical and business expertise available you
21:34
need project management expertise you may need several bodies on site
21:40
possibly full time while you’re not generating Revenue so make sure you’ve
21:46
built that into your working capital assumptions because there’s nothing worse than getting partially through the
21:51
process and having to do a capital call with your Physicians yes I would imagine that is not a very
One piece of advice
21:58
fun conversation to have and you’ve given us so much advice already but if
22:04
there is one piece of advice you would offer everybody to ensure a smooth Journey Through the Regulatory and
22:09
certification process what would it be plan write everything down
22:15
just at the beginning write it all down write down every tiny step and make sure
22:21
that you understand what comes first what comes next and all those dependencies I think sometimes people go
22:27
and do it and feel that they can wing it and bounce from one to the other you want a really good plan
Final question
22:34
yep that makes sense all right final question for you we do this every week with our guests what is
22:41
one thing our listeners can do this week to improve their surgery centers
22:46
so this one has nothing to do with regulatory and certification or credentialing walk your surgery center and thank your staff
22:53
walk walk the whole Surgery Center and say thank you staff are critical they’re harder and harder to find staff is
23:00
harder and harder to keep make sure that they know that they’re appreciated and that you’re setting up that culture of
23:06
thank you and then I would extend that actually out to your clinic office schedulers and make sure that they know
23:13
that they’re appreciated because they’re critical to getting the cases in so it’s really as simple as saying thank you
News Roundup
23:20
I love it that is great advice thank you so much for all of your time and expertise today I really appreciate
23:27
it yeah thank you this is a great conversation [Music]
23:33
as always it has been a busy week in healthcare so let’s Jump Right In a study conducted by researchers at
23:40
buyers Eye Institute of Stanford University found that the chat GPT algorithm could accurately respond to
23:48
Patient queries related to Ophthalmology with Specialists finding it hard to differentiate the chat Bots responses
23:54
from those of their peers so the study evaluated 200 Eye Care questions from an online forum and had
24:02
eight ophthalmologists review the answers and they were able to discern human from bot generated responses with
24:09
an accuracy of 61.3 percent so the quality of the chat bot answers
24:15
is of course on everyone’s mind and what we’re researching here and they found that it was actually on par with human
24:22
answers the comparison they gave was that harm was deemed unlikely an 86.5 of
24:30
the chat bot answers and then harm was deemed unlikely an 84 of the human
24:36
answers however the chat bot was prone to those occasional hallucinations that everyone
24:43
keeps talking about and is most concerned about and which at times the hallucinations had the potential to
24:49
cause harm so for instance it incorrectly stated that cataract surgery could decrease the size of the eye
24:57
so I think we can all agree that while Ai and chat Bots have the potential to
25:03
decrease physician workload they are not quite there yet to be left alone and as we always say this technology needs to
25:10
be used in tandem with Physicians to reduce the administrative burden not in lieu of but as these studies come out
25:17
and as the machines have more data and more content fed to them these answers
25:24
are going to in theory become more accurate so we’ll keep the research coming your way but that was just the
25:30
latest in terms of Ophthalmology and of course they are the same research group as working out some upcoming projects
25:37
focusing on limiting those chatbot hallucinations studying patient attitudes towards Health advice
25:44
generated by chat Bots and then of course any ethical issues regarding the use of AI in medicine as well
25:51
our second story comes from the August edition of ASC focus and it’s all about
25:57
new surgical smoke evacuation requirements Missouri governor Mike
26:02
Parson signed HB 402 into law mandating Healthcare facilities to adopt and
26:08
Implement policies and procedures for evacuating surgical smoke produced by
26:14
energy based devices during surgical procedures and that law will go into effect January 1st 2026 so for Missouri
26:22
in particular you have a little bit of time but you will need to start preparing for this 12 other states have
26:28
enacted their own surgical smoke evacuation requirements with eight of them already in effect
26:34
and most of these laws are identical requiring hospitals and ACS to prevent
26:40
human exposure to the surgical smoke through the use of a surgical spoke evacuation system however Georgia and
26:47
Louisiana’s laws do not mandate the use of a surgical smoke evacuation system to get rid of the smoke they just require
26:54
that you do so however you do it is fine with them you just got to do it and since 2016 23 states have introduced
27:02
70 bills requiring the implementation of surgical smoke evacuation policies
27:08
and the association of perioperative registered nurses continues to push for surgical smoke-free operating rooms
27:14
Nationwide and the reason is that the smoke can potentially contain harmful substances such as cellular material
27:21
that includes viruses and bacteria toxic gases and carcinogens and can cause
27:27
respiratory problems eye irritation headaches and nausea so the moral of the
27:32
story is as the push for surgical smoke-free ORS continues we can expect to see more legislation in the near
27:39
future all right Switching gears to our next story as of September 1st 2023 United
27:47
Healthcare will begin its two-phase approach to eliminating prior authorization requirements
27:54
the goal of the new rule is to eliminate prior auth plan wide by 20 so as of
28:01
September 1st codes will be eliminated for United Healthcare Medicare Advantage
28:06
commercial Oxford and individual exchange plans and the September 1st
28:12
elimination does include codes for several major procedures across various Specialties including Gastro and spine
28:21
and then on November 1st codes will be eliminated for the United Healthcare community plan as well
28:27
so the driver behind this is that prior authorization is often cited as the largest burden in patient care by
28:33
Healthcare Specialists causing both States and payers to draft their own plans to eliminate requirements and a
28:40
rep from UHC shared UHC is making the change in an effort to simplify the
28:46
health care experience for our members and network Healthcare professionals simple as that
28:51
and Andrew lovewell who’s the CEO of Columbia Orthopedic Group in Missouri
28:57
shared that from his perspective the prior authorization issues that we face
29:02
every day with commercial payers is overwhelming many of the rules seemingly change day to day and the payer policies
29:08
dictate provider decisions in a negative way many times on top of that many payer
29:14
policies are up to date with new research and we are chasing old assumptions
29:19
so it’s not often that the state the Physicians and the payers all agree on something and actually take action so it
29:26
will be very interesting to see how this reduction in Prior auth requirements plays out
29:32
and to end our new segment on a positive note researchers at UC San Francisco and
29:38
UC Berkeley have used technology known as brain computer interface to enable
29:44
people with severe paralysis to communicate through a digital Avatar
29:49
so the technology synthesizes speech or facial expressions from brain signals and can decode these signals into text
29:56
at nearly 80 words per minute now this type of Technology isn’t new but these
30:02
researchers added in the help of AI to take it one step further so the article
30:07
shares the story of a woman named Anne who suffered a brain stem stroke that left her severely paralyzed so Edward
30:15
Chang and his team implemented a paper-thin rectangle onto the surface of Anne’s brain and then train the system’s
30:23
AI algorithms to recognize her unique brain signals for speech
30:28
the team then used old video footage to personalize the voice to sound just like
30:33
ants did before her injury and they personalized her Avatar too this type of research has the potential
30:40
to transform the lives of people with severe paralysis ultimately giving them
30:46
hope and the ability to communicate as fast as we do and to have much more naturalistic abnormal conversations
30:53
which is amazing so I highly encourage you to check out the episode notes and
30:58
find the link to this story because the video is so heartwarming and it’s really fascinating to see how it all works
31:06
and that news story officially wraps up this week’s podcast thank you as always
31:11
for spending a few minutes of your week with us make sure to subscribe or leave a review on whichever platform you’re
31:17
listening from I hope you have a great day and we will see you again next week
31:29
[Music]
welcome to this week in surgery centers if you’re in the ASC industry then
0:05
you’re in the right place every week we’ll start the episode off by sharing an interesting conversation we had with
0:11
our featured guests and then we’ll close the episode by recapping the latest news impacting surgery centers we’re excited
0:18
to share with you what we have so let’s get started and see what the industry’s been up to [Music]
Show Topics
0:27
hi everyone here’s what you can expect on today’s episode beata Canby is a
0:32
principal and partner at Left Coast Healthcare advisors and she joins us today to talk about managing the
0:38
Regulatory and certification process while trying to open a new Surgery Center so this is the fourth episode in
0:46
our de novo series and this topic was one of our most highly requested as it can be so nuanced and there are just so
0:53
many moving Parts but Bayada does a great job of breaking down the fundamental agencies to know what order
1:00
to get your certifications in and tips for speeding up the process and staying organized in our news recap we’ll cover
1:08
another research study that compared chat GPT responses to ophthalmologists new surgical smoke evacuation
1:15
requirements United healthcare’s new prior authorization requirements or lack
1:20
thereof and of course end the new segment with a positive story about a woman who is severely paralyzed but she
1:28
got her voice and likeness back thanks to new technology that combines AI with
1:33
a brain computer interface hope everyone enjoys the episode and here’s what’s going on this week in
1:40
surgery centers [Music] hi bayata welcome to the podcast
About Beata
1:47
hello hello can you please share a little bit more about yourself and Left Coast Healthcare
1:54
advisors with our listeners yeah sure so my name is Bayada Canby I have a
1:59
background in hospital operations and strategy but my real focus is Construction in the built environment in
2:05
the ASC space so that’s designing asc’s getting them open activating them and
2:12
that whole span of work I’ve worked in both the U.S and Canada on hospitals and ASCS and Left Coast Healthcare advisors
2:19
is a newer advisory firm that I am part of a West Coast based and we do kind of
2:26
Soup To Nuts ASC Consulting so operations clinical process legal and
2:32
business structure kind of everything ASC is our wheelhouse very cool yeah I know Michael your
Why regulatory and certification are important
2:39
colleague was on one of the episodes recently as well and so I’m really excited to sit down with you today
2:45
because as you know we’ve been talking to a lot of different industry experts and Consultants about the process of
2:51
opening a new Surgery Center and whenever we do a poll of the audience on what they have the most
2:57
questions about it’s always the Regulatory and certification requirements and all the confusion and
3:04
red tape and paperwork there so could you provide some insight into why these
3:11
processes at a high level are so important yeah at a high level and really
3:16
basically you can’t perform cases you can’t open and you can’t get paid unless you follow all the rules and get
3:22
everybody on board and have all the right license and the way that it’s set up or the way that it works is there’s
3:29
really clear dependencies so you can’t get one without this other one you can’t get this one without this one so it’s
3:35
not just getting the right licenses it’s getting them in the right order so for
3:41
example as part of the process you need to do demonstration cases for CMS you can’t do
3:47
those without your state license and you can’t do them without a DEA license another example you can’t get insurance
3:53
to credential you without a state license so that all the different pieces and then the order are critical
What regulatory agencies to look for
4:00
sure yeah and I feel like that is the most stressful part for somebody going through the first time is like what do I
4:06
do first and where do I begin so you’ve mentioned a couple of these but what are the fundamental agencies to look for uh
4:13
regulatory accrediting bodies that really drive this process yeah I’d like to say there’s lots of
4:20
cooks in the kitchen when it comes to ASC regulatory the regulatory Gauntlet
4:25
and I would like to say it’s a short list or there’s some that are more important than others there aren’t so it
4:32
starts with your local construction and inspections department and that’ll be based on your city or your county and
4:39
then there’s also local business and tax agencies then you can go up depending on your state you may need a certificate of
4:46
need which can be a long and complex process then you get to your State Licensing
4:51
Board which could be Department of Health Department of Licensing the department of occupational health and
4:57
safety very State dependent there’s also attorney general and health authority
5:03
notification bodies CMS DEA
5:08
then third party accrediting agencies so those would be for example triple ahc
5:14
Joint Commission quad ASF if you’re doing Imaging or nuclear
5:19
medicine there’s a whole nother set of regulatory agencies you have to go through and then Insurance payers so it’s a long
5:28
list of folks that need to be involved in your regulatory review
Navigating the regulatory process
5:33
yeah definitely and I just feel like for the average physician or group of
5:38
Physicians trying to go through this it must be so overwhelming you know if you’ve never gone through this before
5:44
and I would imagine at this level there’s probably so many different consultants and advisory groups that you
5:51
can turn to for help right because and I also feel like no one should feel crazy for not knowing the order or where to
5:59
begin 100 it is complicated it is I’m gonna say it it’s difficult
6:06
and if you get one piece wrong it can put it all in Jeopardy and it’s this crucial time at your ASC where you may
6:14
have the keys but you can’t start generating Revenue so it’s just it feels like you’re just
6:21
spending cash so you want to do it efficiently as possible yeah okay so with so many agencies
How to organize the process
6:28
involved in so many moving Parts how can you organize it and where do you suggest
6:33
people begin I think that sequencing and planning key so where you start is either with a
6:41
pen and paper or MS project or smartsheet and you gotta write it all
6:47
down you have to write down every agency that will have to be involved depending
6:52
on your state and your location and then you’ve got to map out the durations and
6:57
the dependencies so you end up with this big Gantt chart of here’s what I have to
7:03
do and it is unique location to location so it’s not like you can go online and download you know key to opening a
7:10
surgery center in Kentucky it’s going to be different depending on your locality the way I like to think of it is start
7:18
local and expand out so start with that local agency that is
7:23
your local construction and inspection department and your contractor should support you in that then expand out to
7:30
local business and tax then go to the state then go Federal it’s just a nice
7:36
way to organize your thought process but definitely write it all down write down the cost for each because that’s
7:42
important to consider is the licensing fees and all of that and then the next thing is reach out to the agencies reach
7:50
out to the Department of Health reach out to your local construction and inspection department start to build
7:56
those relationships it really helps to know who to talk to and you can find all
8:01
those contacts usually online then ask colleagues ask people locally or nearby
8:07
you know what their experience was how they did it and most importantly ask
8:12
them about timing and delays in your local market another great resource for getting that information is local conferences so
8:20
local ASC conferences they have that very localized knowledge and they’ll also have potentially support around
8:27
that but talk to people because you’re not the first person doing this and there’s people out there that might be
8:33
able to give you tips and tricks yeah and with the conferences I would imagine the state ASC associations can
What is deemed status
8:41
probably offer some level of support or at least say hey I know so and so just
8:46
opened their Surgery Center last year let me put you in touch with them and I but I think that’s a great guidance
8:52
conceptually start local branch out because that’s probably confusing too like should I go right to CMS or you
8:59
know what do I do here yeah okay so let’s talk about deemed status
9:06
can you share what that is and how it could maybe help simplify the process
9:14
so deemed status is the term that’s used for when CMS contracts with an accrediting body to
9:22
perform the regulatory function so CMS will contract with let’s say AAA
9:28
HC and triple HC will do all of the review and triple ahc will do your
9:35
on-site survey so it’s like a third-party way for CMS to do things and
9:40
what I would call out is that it varies by state what those accrediting agencies
9:46
that CMS works with are and the process for doing it so a quick example in
9:52
Washington state today you have to go deemed status there is no other option
9:58
currently in Washington so you’re kind of forced into a relationship with triple ahc or an
10:05
accrediting body in order to get your CMS certification and that’s kind of a relatively recent change you know some
10:13
organizations are like well I don’t want to be accredited you have to in Washington state these
10:19
days you can let that accreditation lapse in the future if your insurance contracts let you but you have to go deem status
Accreditation
10:26
gotcha question if you don’t have that accreditation does that have any impact
10:32
on the surgery center Long Term does it help with parent negotiation rates or anything what could it do
10:41
yeah so accreditation is it’s a strategic decision now there’s some things you have to check certain
10:46
Insurance payers require accreditation so if you want to be contracted with that payer you have no choice certain
10:53
States like I mentioned require you to be accredited to get that CMS but there are some organizations that choose not
10:59
to because of financial reasons you know there’s annual fees involved and things like that it really is a choice and
11:06
there are several accrediting bodies out there that you can pick from but it really is a choice on just how you want
11:11
you know a lot of surgery centers will put it on their website that their quad ASF certified or triple ahc or Joint
11:18
Commission yeah so it’s just a way to stamp your quality and that you’ve been surveyed
11:23
status simplifies the process a bit but it’s not a simple process you know when
11:28
I think of it there’s 10 steps at a high level and they’re pretty much in order but at the same time sometimes depending
11:36
on your state you can do two concurrently or you can switch them around a little bit so the very first
11:42
step is you have to get your local certificate of occupancy that document and if you’re building new
11:48
or a TI your contractor will help work with you to get that that’s usually
11:53
issued by the fire department and it says you’re okay to have human beings in this space working
11:59
so you have to have that in order to occupy the building next up if your state requires a state license you got
12:06
to get your state license some states don’t require a state license but Most states do
12:11
next up you apply for your facility NPI so that’s a fairly simple process to get
12:17
a facility level NPI the fourth step is you submit your applications and you submit your CMS
12:24
application and your accrediting body application and again you can do that online
12:30
once that application goes in you should receive an approval letter from CMS
12:36
it may come from a company named Meridian or another company they are
12:42
Regional organizations that work on behalf of CMS next up I would say apply for your DEA
12:48
license is the next thing you want to do and there’s a couple different ways to go about it
12:54
you can go straight to the feds and apply for a facility license that’s going to take you the longest
12:59
you can go straight to your local DEA office in person that’s what we do here
13:04
in Seattle we walk up to a desk and we talk to a person so if you’ve got a local DEA office great way to expedite
13:12
the fastest and riskiest way to get a DEA license is to use your medical
13:18
directors DEA license to procure drugs but some doctors are not willing to do
13:23
that because it does result in some additional risk for them because it’s their personal medical DEA license
13:29
that’s then tied to the facility so really best option find a local DEA
13:34
office and walk in have that DEA license the next step is to perform your 10
13:41
demonstration cases so you have the drugs to be able to perform those cases you may be able to do self-pay and get
13:48
cash for those but you can’t bill insurance so there’s 10 cases that you got to do yeah can I ask a question
Getting the first 10 cases
13:54
about that really quick how do you go about getting those 10 is there any
14:00
one way most people do it or any tips for getting those first 10 cases
14:06
in my experience you ask the surgeons and say hey do you have a patient that
14:12
you want to pull in for this period do you have a patient that you don’t want to charge insurance for or that is able
14:18
to do cash pay so it’s really sourcing with the surgeons and finding having them
14:24
find the right patients gotcha and do they typically disclose anything to the
14:29
patient ahead of time hey we’re not that you know yeah
14:35
like we’re not fully open we have to do these 10 cases I think a lot of places do disclose the patient and also the
14:42
facility will be empty and so sometimes patients ask about that after you do those 10 demonstration
14:48
cases you want to notify CMS and the accrediting body of your on-site survey
14:54
readiness once you have that’s it’s an unannounced survey uh so there’s a couple of things
15:02
there so it’s an unannounced survey they must be able to observe a case so this
15:07
is where you have to let CMS and the accrediting body know of your opening hours so let’s say your business plan is
15:15
to be open long-term steady state five days a week all day long during this period you may say we’re
15:22
only open on Mondays and Wednesdays from this hour to this hour because you have to have staff there
15:28
because when the surveyor walks in there’s got to be somebody there and so you got to be open and ready to
15:34
go and you have to have cases running so it’s this kind of weird period and managing those opening hours
15:40
is key in communicating with the accrediting body that like we’re not open on Tuesdays don’t come on Tuesday
15:46
and then after the survey they will either say you’re good to go you passed or they’ll issue a plan of
15:53
Correction if they issue there’s a different level of findings so you submit this plan of Correction and say here’s how we’re
15:59
going to fix all the problems but I would caution if there’s what’s called a conditional finding which is a more
16:06
severe finding you have to wait three months to re-survey and so that can be a big delay so you
16:14
really want to make sure you’re ready for that survey and there are companies out there we’re one of them that will
16:20
come in and do a mock Readiness survey those are great they test your staff they test your operations they’re really
16:27
useful to do mock surveys yeah Status
Status
16:33
yeah that’s super helpful and for our listeners I will share this list in the episode notes no one has to
16:40
scramble to take things down but yeah that’s really interesting we did an episode a while ago about that mock
16:46
Readiness survey or also not even just a mock Readiness or just doing mock accreditation surveys in general when
16:52
you know your time is coming and I thought it was really interesting too and also you know being prepared for the
16:58
moment somebody walks in with the clipboard unannounced can be very stressful I would imagine if you’re not
17:04
prepared so that’s really interesting in your experience has there been any like
Conditional Findings
17:09
common conditional findings that people have found that have given them that
17:14
three-month delay or is that super rare no it’s not rare you know this is where
17:21
it really helps to talk to your network and your colleagues because every now and then the accrediting bodies kind of
17:28
they start focusing on something and there’s different Trends but those conditional findings often their life
17:33
safety their critical clinical patient care issues yeah but they can be avoided
17:39
by those mock surveys and testing yourself gotcha yeah that makes sense okay
Credentialing
17:44
Switching gears a little bit so we talked about pair contracts a week or two ago with your colleague Michael but
17:51
walk us through the credentialing and privileging piece of this how is that different from Pair negotiations and
17:57
what does this step really look like yeah so there’s two interactions that at
18:04
a high level that you’ll have with insurance payers one is negotiating your contracts and that’s what Michael spoke
18:10
about previously is getting your rates and your contracts in place the other portion is credentialing and you are
18:18
required to credential with all the different payers and both the facility and the providers must be credentialed
18:25
you must credential the facility first and then the Physicians add that new
18:32
site to their professional list of sites served so facility first then the docs
18:38
you know the estimated time to process these credentialing applications is 60
18:44
to 90 days but that can vary by payer and locality what I would say is start
18:50
early start as early as possible some payers will allow you to submit an
18:57
early application even before your CMS and state licenses are complete
19:02
they may tell you they won’t but in our experience if you push them a little bit they’ll let you submit everything and
19:09
they’ll just flag it that it’s not ready for review yet but at least you get it in
19:14
some payers state by state have really onerous requirements for credentialing
19:19
so the example I like to use is Michigan Blue Cross Blue Shield historically had
19:25
a whole separate process called the evidence of need process that was rigorous you basically needed to prove
19:34
that there was need in the community in order to get that contract now that program is currently suspended they
19:41
haven’t eliminated it but it is suspended and so that just means things change all the time with insurance
19:46
payers and then the second part is privileging and that’ll happen at the facility level
19:51
and you need to make sure you have policies and procedures and bylaws in place to support that privileging to
19:58
privilege different surgeons to do different procedures but the credentialing process is just a lot of
20:03
paperwork and you feel like oh I’m already working with a team on my contract negotiation this is a different
20:09
team that you’ll work with got it all the teams
Challenges
20:16
okay yeah that makes sense now zooming back out what are some of the most
20:22
common challenges that people typically encounter during this whole process that
20:27
you’ve walked us through I think the biggest one overall is delays
20:32
and delays for things that are out of your control so then I go back to your
20:38
Gantt chart or your schedule so that you can say oh no you know our State
20:44
Department of Health is running 8 to 12 weeks behind not uncommon then you gotta
20:49
slide things around on that schedule another one and your contractor should help manage this but for example in
20:56
Seattle our construction and inspections department is running really behind post covid so like a plumbing permit can take
21:03
months longer than you expected which delays your certificate of occupancy so
21:08
again talk to people find out what those local delays are and then have contingency plans and always go back to
21:16
that plan another risk and it’s something to plan for up front is that this whole process
21:23
remember you’re not generating Revenue but you’re generating expense you need
21:29
to have staff there you need clinical and business expertise available you
21:34
need project management expertise you may need several bodies on site
21:40
possibly full time while you’re not generating Revenue so make sure you’ve
21:46
built that into your working capital assumptions because there’s nothing worse than getting partially through the
21:51
process and having to do a capital call with your Physicians yes I would imagine that is not a very
One piece of advice
21:58
fun conversation to have and you’ve given us so much advice already but if
22:04
there is one piece of advice you would offer everybody to ensure a smooth Journey Through the Regulatory and
22:09
certification process what would it be plan write everything down
22:15
just at the beginning write it all down write down every tiny step and make sure
22:21
that you understand what comes first what comes next and all those dependencies I think sometimes people go
22:27
and do it and feel that they can wing it and bounce from one to the other you want a really good plan
Final question
22:34
yep that makes sense all right final question for you we do this every week with our guests what is
22:41
one thing our listeners can do this week to improve their surgery centers
22:46
so this one has nothing to do with regulatory and certification or credentialing walk your surgery center and thank your staff
22:53
walk walk the whole Surgery Center and say thank you staff are critical they’re harder and harder to find staff is
23:00
harder and harder to keep make sure that they know that they’re appreciated and that you’re setting up that culture of
23:06
thank you and then I would extend that actually out to your clinic office schedulers and make sure that they know
23:13
that they’re appreciated because they’re critical to getting the cases in so it’s really as simple as saying thank you
News Roundup
23:20
I love it that is great advice thank you so much for all of your time and expertise today I really appreciate
23:27
it yeah thank you this is a great conversation [Music]
23:33
as always it has been a busy week in healthcare so let’s Jump Right In a study conducted by researchers at
23:40
buyers Eye Institute of Stanford University found that the chat GPT algorithm could accurately respond to
23:48
Patient queries related to Ophthalmology with Specialists finding it hard to differentiate the chat Bots responses
23:54
from those of their peers so the study evaluated 200 Eye Care questions from an online forum and had
24:02
eight ophthalmologists review the answers and they were able to discern human from bot generated responses with
24:09
an accuracy of 61.3 percent so the quality of the chat bot answers
24:15
is of course on everyone’s mind and what we’re researching here and they found that it was actually on par with human
24:22
answers the comparison they gave was that harm was deemed unlikely an 86.5 of
24:30
the chat bot answers and then harm was deemed unlikely an 84 of the human
24:36
answers however the chat bot was prone to those occasional hallucinations that everyone
24:43
keeps talking about and is most concerned about and which at times the hallucinations had the potential to
24:49
cause harm so for instance it incorrectly stated that cataract surgery could decrease the size of the eye
24:57
so I think we can all agree that while Ai and chat Bots have the potential to
25:03
decrease physician workload they are not quite there yet to be left alone and as we always say this technology needs to
25:10
be used in tandem with Physicians to reduce the administrative burden not in lieu of but as these studies come out
25:17
and as the machines have more data and more content fed to them these answers
25:24
are going to in theory become more accurate so we’ll keep the research coming your way but that was just the
25:30
latest in terms of Ophthalmology and of course they are the same research group as working out some upcoming projects
25:37
focusing on limiting those chatbot hallucinations studying patient attitudes towards Health advice
25:44
generated by chat Bots and then of course any ethical issues regarding the use of AI in medicine as well
25:51
our second story comes from the August edition of ASC focus and it’s all about
25:57
new surgical smoke evacuation requirements Missouri governor Mike
26:02
Parson signed HB 402 into law mandating Healthcare facilities to adopt and
26:08
Implement policies and procedures for evacuating surgical smoke produced by
26:14
energy based devices during surgical procedures and that law will go into effect January 1st 2026 so for Missouri
26:22
in particular you have a little bit of time but you will need to start preparing for this 12 other states have
26:28
enacted their own surgical smoke evacuation requirements with eight of them already in effect
26:34
and most of these laws are identical requiring hospitals and ACS to prevent
26:40
human exposure to the surgical smoke through the use of a surgical spoke evacuation system however Georgia and
26:47
Louisiana’s laws do not mandate the use of a surgical smoke evacuation system to get rid of the smoke they just require
26:54
that you do so however you do it is fine with them you just got to do it and since 2016 23 states have introduced
27:02
70 bills requiring the implementation of surgical smoke evacuation policies
27:08
and the association of perioperative registered nurses continues to push for surgical smoke-free operating rooms
27:14
Nationwide and the reason is that the smoke can potentially contain harmful substances such as cellular material
27:21
that includes viruses and bacteria toxic gases and carcinogens and can cause
27:27
respiratory problems eye irritation headaches and nausea so the moral of the
27:32
story is as the push for surgical smoke-free ORS continues we can expect to see more legislation in the near
27:39
future all right Switching gears to our next story as of September 1st 2023 United
27:47
Healthcare will begin its two-phase approach to eliminating prior authorization requirements
27:54
the goal of the new rule is to eliminate prior auth plan wide by 20 so as of
28:01
September 1st codes will be eliminated for United Healthcare Medicare Advantage
28:06
commercial Oxford and individual exchange plans and the September 1st
28:12
elimination does include codes for several major procedures across various Specialties including Gastro and spine
28:21
and then on November 1st codes will be eliminated for the United Healthcare community plan as well
28:27
so the driver behind this is that prior authorization is often cited as the largest burden in patient care by
28:33
Healthcare Specialists causing both States and payers to draft their own plans to eliminate requirements and a
28:40
rep from UHC shared UHC is making the change in an effort to simplify the
28:46
health care experience for our members and network Healthcare professionals simple as that
28:51
and Andrew lovewell who’s the CEO of Columbia Orthopedic Group in Missouri
28:57
shared that from his perspective the prior authorization issues that we face
29:02
every day with commercial payers is overwhelming many of the rules seemingly change day to day and the payer policies
29:08
dictate provider decisions in a negative way many times on top of that many payer
29:14
policies are up to date with new research and we are chasing old assumptions
29:19
so it’s not often that the state the Physicians and the payers all agree on something and actually take action so it
29:26
will be very interesting to see how this reduction in Prior auth requirements plays out
29:32
and to end our new segment on a positive note researchers at UC San Francisco and
29:38
UC Berkeley have used technology known as brain computer interface to enable
29:44
people with severe paralysis to communicate through a digital Avatar
29:49
so the technology synthesizes speech or facial expressions from brain signals and can decode these signals into text
29:56
at nearly 80 words per minute now this type of Technology isn’t new but these
30:02
researchers added in the help of AI to take it one step further so the article
30:07
shares the story of a woman named Anne who suffered a brain stem stroke that left her severely paralyzed so Edward
30:15
Chang and his team implemented a paper-thin rectangle onto the surface of Anne’s brain and then train the system’s
30:23
AI algorithms to recognize her unique brain signals for speech
30:28
the team then used old video footage to personalize the voice to sound just like
30:33
ants did before her injury and they personalized her Avatar too this type of research has the potential
30:40
to transform the lives of people with severe paralysis ultimately giving them
30:46
hope and the ability to communicate as fast as we do and to have much more naturalistic abnormal conversations
30:53
which is amazing so I highly encourage you to check out the episode notes and
30:58
find the link to this story because the video is so heartwarming and it’s really fascinating to see how it all works
31:06
and that news story officially wraps up this week’s podcast thank you as always
31:11
for spending a few minutes of your week with us make sure to subscribe or leave a review on whichever platform you’re
31:17
listening from I hope you have a great day and we will see you again next week
31:29
[Music]
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